South Africa’s ecommerce transactions have reached record levels and, despite stabilising, digital ecommerce is likely to sustain growth for the rest of the year.

Ecommerce transactions surged during May and June, with the last weekend in May experiencing four times the transactions per minute than experienced in the busiest minute during Black Friday last year.

“June was similar to May and we expect our monthly volumes for the rest of the year to settle at around 40% higher than last year,” explains payment provider DPO South Africa MD Peter Harvey.

“While there will be some levelling off, the new love affair with digital commerce is unlikely to fade in coming months, offering some relief in an otherwise grim economy.”

The adoption of ecommerce is a positive sign after the depressing financial metrics published over the past weeks, he adds, citing the aftermath of the sharpest decline in history of the BankservAfrica Economic Transaction Index (BETI), which measures transactions between South Africa’s banks.

The three months ending May saw transactional value drop by 20%, compared with the same period in 2019.

“The BETI, which comprises the value and number of transactions, saw both declining substantially in May 2020. Our data shows the economy recorded 20% less in transaction value than a year ago and that the number of transactions fell by 9.1% year-on-year,” says BankservAfrica stakeholder engagement head Shergeran Naidoo.

April recorded the biggest decline in its history across monthly, quarterly and annual levels; however, on a monthly basis, the index tracked an improvement in May, suggesting the worst of the economic impact from the Covid-19 lockdown levels is over.

The overall impact over the three months to May points to a long road to recovery for the South African economy.

“Although the latest bank transaction numbers paint a grim picture, we believe the ecommerce transactional numbers prove that South Africans are still spending online and, with some innovative thinking, there is certainly room for optimism for local entrepreneurs,” says Harvey.

The Covid-19 lockdown has catapulted digital commerce forward by at least five years, accelerating a greater retail revolution, which has been under way for some time.

There has been a visible shift in focus from the formal retail sector over the preceding years to the informal sector, including spaza shops and informal vendors, which are now fast approaching the same monthly revenues as the formal sector.

“While digital retail currently only accounts for a small percentage of the formal sector’s monthly trade, both the informal and digital sectors are the solid areas of growth opportunity, which should be appealing to the savvy entrepreneur,” he adds.

Historically, one of the biggest obstacles to transacting online for many consumers has been the trust aspect of ecommerce.

“We think the launch of three-dimensional Secure 2.0 will make a big difference. It offers a much better user experience, coupled with a more secure authentication process, both of which will enhance the shopping experience.”

There is a need for the full support of all issuing banks.

“Most are very happy to promote digital commerce when they issue debit or credit cards, but some still make their customers jump through too many hoops before they are able to transact online. We hope this will change soon,” Harvey continues.

Harvey believes the stellar performance of South African online businesses this year, as well as the signs that there is still room for growth, could offer the country an economic lifeline.