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NIQ’s 2024 consumer outlook
Competition in South Africa’s e-commerce sector is heating up with the entries of Chinese online retailers Shein and Temu eating up market share ahead of the anticipated entry of US retail giant Amazon. For a closer look at the sector and trend, CNBC Africa is joined by Zak Haeri, Managing Director of consumer intelligence firm, NIQ & GfK.
Wed, 24 Apr 2024 15:58:52 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Evolving Landscape: The shift towards omni-channel retailing and the impact of changing consumer behaviors on the e-commerce sector.
- Price-Conscious Consumers: The influence of stagnant wages on consumer spending habits and the growing demand for competitive pricing and loyalty schemes.
- Winners and Losers: The importance of value innovation for companies to stay competitive, challenges faced by multinational retailers in Africa, and opportunities for local players in the market.
Competition in South Africa's e-commerce sector is intensifying as Chinese online retailers Shein and Temu are gaining market share, setting the stage for the anticipated arrival of US retail giant Amazon. To delve into the sector's dynamics and changing trends, Zak Haeri, the Managing Director of consumer intelligence firm NIQ & GfK, shared insights in a recent interview with CNBC Africa.
Haeri highlighted the evolving landscape of e-commerce in South Africa, emphasizing the shift towards omni-channel retailing. He noted that consumers are increasingly engaging in multi-channel shopping experiences, using their smartphones to compare prices and seek out the best deals both in-store and online. With real wages remaining stagnant in South Africa, consumers are becoming more price-conscious and value-driven, leading to a growing demand for competitive pricing and loyalty schemes.
As e-commerce continues to expand as a preferred shopping channel, Haeri underscored the significant presence of Chinese retailers in the market and the anticipation surrounding Amazon's potential entry. While acknowledging concerns about unfair competition practices, Haeri pointed out the need for retailers to adapt to changing consumer behaviors and innovate to stay ahead.
Discussing the competitive landscape, Haeri recognized the importance of value innovation in driving success in the market. He highlighted the opportunities for companies to differentiate themselves by offering lower prices and increased value to consumers, while also adapting to shifting market dynamics and consumer expectations. Haeri emphasized the challenges faced by multinational retailers operating in Africa's complex business environment but noted the potential for local players to leverage a competitive advantage against international rivals.
In assessing the winners and losers in the South African e-commerce space, Haeri suggested that companies willing to embrace bold innovation and value-driven strategies are likely to emerge as industry leaders. He also acknowledged the unique challenges faced by local companies in addressing the last-mile delivery challenge, particularly in rural and township areas. Despite these obstacles, Haeri expressed optimism about the opportunities for growth and competition within the African e-commerce market.
In conclusion, the e-commerce sector in South Africa is witnessing fierce competition and rapid evolution, driven by changing consumer preferences and the entry of new players. As retailers navigate these challenges and opportunities, the key to success lies in innovation, value creation, and adaptation to meet the demands of an increasingly tech-savvy and price-conscious consumer base.
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