South Africa’s E-Commerce Revolution: Digital Retail Surges to 10% of Total Market

South Africa’s e-commerce sector is forecasted to achieve over 130 billion rand (approximately $7.48 billion) in sales for 2025, now representing 10% of the nation’s retail spending—a dramatic rise from under 10 billion rand a decade ago. This rapid transformation, revealed in the “Online Retail in South Africa 2025” report by World Wide Worx with partners Mastercard, Peach Payments, and Ask Afrika, signals a structural shift in the country’s economy, with online retail evolving from a fringe experiment to a major force.

Online retail has expanded at a phenomenal rate, largely fueled by the COVID-19 pandemic’s push for digital transformation and by proactive strategies from both local and international players. Since 2020, sales have quadrupled, and the sector is now growing more than ten times faster than traditional retail, which increased just 2.5% in 2024 and 1.6% in mid-2025, compared to 35% growth in online sales.

Dominant domestic companies—including Shoprite, Pick n Pay, Woolworths, Foschini, and Truworths have invested heavily in building responsive digital platforms. Simultaneously, global giants such as Amazon, Shein, and Temu entered the South African market, driving further expansion and consumer choice. On-demand delivery and advanced payment systems have elevated the convenience and accessibility of e-commerce, especially in critical sectors like groceries and fashion.

However, this dynamic shift brings both opportunities and challenges. While South African retailers largely rate their e-commerce capabilities as competitive, and many adapt by embracing tools like WhatsApp commerce and artificial intelligence, concerns linger. The influx of low-cost international goods has exerted pressure on local manufacturing and retail jobs. Research from the Localisation Support Fund (LSF) suggests about 8,100 positions were impacted by competition in 2024, with up to 34,000 jobs potentially at risk by 2030 if current trends persist. The government has responded by adjusting customs regulations and removing VAT exemptions on small parcels, though enforcement gaps remain.

Despite these concerns, the sector’s growth has broadened access across the country, supported by rising internet penetration, improved digital payments, and shifting consumer habits. E-commerce is now integral to the retail landscape—a permanent, scalable engine of economic activity.

This digital retail boom provides investors and entrepreneurs with significant opportunities:

• Technology and payment infrastructure: Businesses offering secure payment solutions, logistics, or digital marketing services stand to benefit.
• Retail partnerships and platforms: Both local and global brands can leverage South Africa’s sophisticated e-commerce ecosystem to introduce products and services.
• On-demand delivery and last-mile logistics: With immediacy now a key factor, growth prospects are strong for firms optimizing delivery models.
• Local manufacturing innovation: There’s space for businesses to differentiate via product quality, local branding, and targeted digital engagement to compete with international imports.

Consulting and AI solutions: Demand rises for efficiency and customization in retail, opening opportunities for tech consultants and AI platform providers.