South Africa’s fast-growing online retail market is on track to exceed $7 billion (R130 billion) in sales by the end of 2025, making up almost 10% of the country’s total retail spend for the first time.
- South Africa’s online retail market is projected to surpass $7 billion by 2025, constituting approximately 10% of the nation’s retail spending.
- Rapid e-commerce growth, driven by platforms like Shein and Temu, poses challenges to local jobs and businesses while accelerating technological adoption.
- The digital divide remains significant, with many people offline due to factors like device affordability and accessibility issues.
- Local retailers are adapting to e-commerce trends, utilizing tools like WhatsApp commerce and exploring AI-driven opportunities.
According to the Online Retail in South Africa 2025 report by World Wide Worx, sales grew by 35% in 2024 and are projected to rise by another 38% in 2025, far outpacing physical retail.
Arthur Goldstuck, CEO of World Wide Worx, said this shift shows how quickly e-commerce has moved from the margins to the centre of South Africa’s retail economy.
“Nearly one in every ten rand spent at retail will now be online. This is no longer just an experiment; it’s a structural force in the economy,” he said.
But alongside this rapid growth, new concerns are emerging about the impact on local jobs and the uneven spread of benefits.
A study by the Localisation Support Fund (LSF) found that by 2024, about 8,100 local jobs, mainly in retail and manufacturing, had not materialised due to rising competition from international platforms like Shein and Temu.
If current trends continue, the report warns that up to 34,000 jobs could be at risk by 2030 as offshore competition grows.
Simon Eppel, research director at the SA Clothing and Textile Workers’ Union, said low-cost imports are putting pressure on local businesses, warning that it is “depressing the prices that local retailers can charge”.
The government has tightened customs rules and removed VAT exemptions on small parcels to slow the flow of cheap imports, but the LSF says enforcement gaps remain.
While the World Wide Worx report notes that 65% of South African retailers say Shein and Temu have had little effect on their business and 75% rate their own e-commerce systems as better than international rivals, the cumulative effect on jobs and local suppliers is still a concern.
Another challenge is the digital divide
A 2025 GSMA report shows that while mobile internet reaches 96% of the world’s population, 3.1 billion people are still offline.
In sub-Saharan Africa, 65% of people remain disconnected. Women are 14% less likely to be online than men, and rural communities are 25% less connected than urban areas.
The GSMA says that the cost of entry-level smartphones remains a major barrier, with basic devices costing up to 16% of monthly income in low- and middle-income countries.
It estimates that a device costing about $30 (R521) could help bring 1.6 billion people online.
Vivek Badrinath, director-general of the GSMA, said that without urgent action to make devices more affordable, millions risk being left out of the digital economy.
“The time has come to drive more meaningful progress,” he said.
Local retailers are also trying to adapt to new trends
The World Wide Worx report shows that while most use traditional tools like cash on delivery (37%) and physical collection points (36%), only a few are using artificial intelligence (9%), drop-shipping (7.5%), automated payouts (2.5%) or virtual reality (1%).
Rahul Jain, CEO of Peach Payments, said WhatsApp commerce is emerging as a powerful channel for small businesses to engage customers directly.
He added that retailers will also need to become “findable by AI” as shopping habits shift to AI-driven search, a shift he described as “the biggest disruptor in search since Google went public”.
Experts say the growth of South Africa’s e-commerce sector offers major opportunities, but also risks deepening inequality if not carefully managed.
Eppel said the projected job losses should be a “wake-up call” for regulators and industry leaders, warning that “e-commerce doesn’t have to come at the cost of local industry”.
Badrinath added that bridging the digital divide will require coordinated action from the mobile industry, device makers, policymakers and financial institutions. “Only by addressing both technological and social barriers can South Africa fully realise the promise of online retail,” he said.
