Gareth Paterson
That’s according to Gareth Paterson, director of client strategy at Nielsen IQ (NIQ) South Africa, who moderated a panel discussion at Converge 2025 on 8 May, the premier event for Africa’s digital commerce ecosystem taking place in Cape Town this week. He says that international experience shows that the opportunity for FMCG retailers and brands grows rapidly as the e-commerce market matures.
“Despite the growth of ‘quick commerce’ grocery deliveries in South Africa since the pandemic, the market remains in the early phases of its maturity,” Paterson adds. In more mature e-commerce markets that NIQ tracks, e-commerce share of value for FMCG is comparable to e-commerce share of value of tech and durable (T&D) goods. In South Africa, however, FMCG share of value of e-commerce is only around 2% compared to 17% for T&D.
This gap between share of value in FMCG and T&D shows that the e-commerce market in South Africa is far from saturated. This presents exciting opportunities for FMCG manufacturers and broad-based retailers. “Our data shows that online T&D sales grew by 11% in 2024 as consumers sought better deals online. We expect to see a similar appetite among grocery shoppers for finding value and convenience on digital platforms,” says Paterson.
“However, growth will likely vary significantly by category - items like personal care, diapers and fragrances are poised to grow faster, while fresh produce may continue to lag due to higher barriers to entry.”
“The South African e-commerce market will be shaped in the months to come by a shift towards greater intentionality in consumers’ shopping habits,” says Paterson. “Consumers worldwide are becoming more vigilant in their purchasing decisions, but the trend is especially pronounced in South Africa.”
NIQ research shows that the cost of living, reflected in food and energy prices, are putting consumers under pressure and reducing their confidence. In response to ongoing economic anxieties, South African consumers are exhibiting more value-conscious behaviours. A recent NIQ Consumer Outlook Report highlights that consumers are increasingly focusing on cost savings, leveraging loyalty programmes, private label brands, and promotions to stretch their rands.
Paterson says that amid these shifting behaviours, e-commerce in South Africa is demonstrating resilient growth. “Echoing the global trend, many consumers are gravitating towards digital channels to compare prices and save money. Our research indicates that 27% of global consumers shop online as a saving strategy, considering the channel a good option to get better deals and save money.”
Is social commerce the next big thing?
E-commerce is rapidly evolving and today encompasses a multitude of channels and touchpoints under the banner of omnichannel commerce. This evolution is driven by factors such as the increasing pace of technological change, the pervasive influence of social media, and growing demand for convenience.
“We’re expecting to see social commerce and other emerging e-commerce models gain traction in the months ahead,” Paterson adds. “Consumers who are active on social media platforms may find it natural to shop as part of their online experience. Similarly, as logistical infrastructure develops, demand for quick commerce solutions may increase in urban centres. Retailers will need to be nimble to keep up with changes in tech and consumer behaviour.”
Some of the key developments shaping the South African e-commerce landscape include:
- Omnichannel integration: Consumers expect a frictionless experience across all channels, online and in-store.
- Social commerce: Platforms like TikTok are emerging as commerce channels, where consumers discover, interact with brands, and make purchases.
- Quick commerce: The demand for rapid delivery is fuelling the growth of quick commerce players, particularly in urban areas.
- Diverse purchase drivers: While price and promotions remain key globally, other factors like wide product range, convenience (saving time and product delivery), and the ability to find niche and premium products are also significant drivers of online shopping.
Taking a full view of the customer journey
“For suppliers and retailers in South Africa, understanding these evolving consumer behaviours and the shifting e-commerce landscape is paramount for future success and growth,” says Paterson. “To accurately track sales, understand consumer preferences, and identify growth opportunities, businesses need to adopt a full view approach across all relevant channels.”
This involves investing in robust e-commerce platforms and partnerships; optimising for mobile; understanding the nuances of "discount" beyond just price to cater to consumers' broader value expectations; monitoring and engaging with emerging channels such as social commerce; and integrating online and offline operations.
Finally, it is essential to leverage data analytics to gain insights into consumer behaviour across different channels, personalise offerings, and optimise pricing and promotional strategies. “The key lies in understanding that the path to purchase is no longer linear and that a holistic view of the consumer journey is essential for staying ahead of the curve,” concludes Paterson.
