South Africa’s online shopping boom seen defying weak demand

South Africa’s appetite for buying clothes, food, and fridges online is likely to defy weak consumer spending as e-commerce grows by as much 50% in the next year, according to the head of local apparel retailer The Foschini Group Ltd. 

“The whole pace of online adoption has really started to speed up,” chief executive officer Anthony Thunström said in an interview Friday. “Four years ago, there were people saying online sales would never be more than 1% in South Africa,” yet they accounted from 7.4% of TFG’s sales in the six months through September, he added.  

The company sees that proportion rising to 10% in the next 12 months and 15% in the following two to three years.

The country’s e-commerce landscape has seen a notable shift since the Covid-19 pandemic, with prominent local retailers like Shoprite Holdings Ltd. offering one-hour food delivery, while global giants Amazon.com Inc., Shein Group Ltd., and Temu have also mounted a challenge. 

Through its Bash platform, TFG offers same- or next-day delivery, using its strong logistics network and faster turnaround times to compete with international rivals that often take as long as 10 days.

TFG earlier reported an almost 10% drop in first-half operating profit as weak and uneven consumer demand dragged on earnings. The shares slumped 6.2% by 4:16 pm in Johannesburg.

TFG is reviewing its discretionary spending, cutting back on some stores and carefully controlling stock levels.

“Online fashion, we’re still spending money on that,” Thunström said. It’s about balancing the long-term online strategy with the short-term need to avoid unnecessary spending, he added.