Black Friday: A Battle for Supremacy in the E-commerce Jungle
As the world gears up for the biggest shopping extravaganza of the year, South Africa’s e-commerce sector is bracing for a bumper year. But with international e-tailers like Temu and Shein dominating the market, local retailers are worried about losing out.
According to a study by the Bureau of Market Research (BMR), on behalf of fintech group Capital Connect, consumer interest in Black Friday is higher than ever, with the retail industry predicted to generate a whopping R22.08 billion in direct revenue. The indirect economic impact of supplier sales is expected to reach R28 billion, with total retail sales for the month of November expected to hit R136 billion, a 17.3% increase from last year.
But the good news is tempered by the harsh reality that local retailers face a host of challenges, including constrained disposable incomes, high inflation, and the rise of international e-commerce providers. The BMR study found that online-only retailers have been particularly hard hit, with many experiencing a decline in sales of up to 30% since the beginning of the year.
Temu, one of the low-cost multinational e-commerce apps that has taken SA by storm, is already gearing up for Black Friday, offering discounts of up to 90% across various categories. Shein, another popular international e-tailer, did not respond to ITWeb’s questions by the time of publication.
Local retailers, meanwhile, are scrambling to stay ahead of the competition. Many are implementing strategies to optimize sales, including having a strong online presence, adding a "click-and-collect" offering, and introducing "shoppertainment" for better in-store customer experiences.
But it’s not all doom and gloom. According to Capital Connect CEO Steven Heilbron, e-commerce is growing rapidly in SA, driven by increased internet penetration, widespread use of smartphones, and competitive retail strategies. Heilbron believes that while online-only sales account for only about 6% of retail sales, the total direct retail sales gains across all channels are expected to be approximately R22.08 billion.
The battle for supremacy in the e-commerce jungle is heating up, and only time will tell who will emerge victorious. One thing is certain, however: Black Friday is shaping up to be a wild ride.
