New report highlights opportunities for consumer spending growth in South Africa
Internet shopping will be the key growth area for consumer spending with the dramatic increase in smart phone ownership driving the South African market.
Global market intelligence company, Euromonitor International, has just released the latest results of the 2017 Global Consumer Trends survey.
Between 2012 and 2016 values sales per household of internet retailing increased by 54 per cent, reaching R520m ($13.5m) in 2016. This includes value sales of mobile internet retailing, more than doubled over the same period.
Moneyweb’s Efi Dahan, regional director for Africa and Israel at digital payments company PayPal, was reported as saying: “The rapid penetration of smartphones and even more affordable ones in South Africa, will continue to be the driving force for online shopping in the coming years. I believe that the smartphone shopping experience will continue to evolve as consumers feel greater comfort and security.”
In a 2017 report on Huffington Post, Jason Muscat, a senior economic analyst at First National Bank (FNB), said “extraordinarily weak business confidence levels – currently at the lowest level since 2009 – will keep a firm lid on household credit extension…bar a swift, confidence-inspiring change to South Africa’s current political landscape, consumer spending is likely to remain depressed during the remainder of 2017.”
The depressed housing market is also having a knock on effect to the sale of white goods. Despite high demand for affordable housing, the prevailing economic climate of recent years coupled with low levels of investment have stalled new building by the government.
In a 2017 report on Fin24, S&P Global Ratings’ senior economist Tatiana Lysenko said: “Residential property prices stagnated in real terms in 2016, as above-target inflation eroded nominal price gains, and construction activity has been soft.”
As a result, demand for a wide range of household-related items has dampened, as it is new homeowners that typically buy such items as new furniture and white goods.
To find out more about Euromonitor’s megatrend analysis, download the white paper.