It may feel like there are more grocery delivery bikes than other vehicles on the road and that supermarkets have more delivery shoppers than ‘real’ shoppers in them, but grocery e-commerce in South Africa is still a tiny fraction of both total e-commerce and total grocery retail.

Before we get to actual numbers, it’s worth unpacking the challenge of arriving at them.

Retailers are very selective and often inconsistent about the data they share on their e-com efforts. A volume growth percentage here, a value growth percentage there, a rare share of total revenue. Woolworths helpfully declares its online food sales as a percentage of its total Food turnover (thanks, Woolies!), but otherwise getting to an accurate market estimate is even trickier than trying to hit the minimum order quantity for free online delivery by a margin of less than R10.

Anyway, at Trade Intelligence we have smart people who enjoy wrangling vague numbers into credible estimates, and we have calculated the value of the FMCG e-com segment of the market to be R13.9bn in 2023, or 1.8% of total FMCG retail. So, if total FMCG retail was a supermarket, e-com would barely be a gondola end.

Can it really be that tiny?

It’s logical if you think about it. The big players in grocery e-commerce (Checkers, Pick n Pay, Woolworths, SPAR) are nowhere near as big as Shoprite Retail, which has only begun to dip its toe in the e-commerce pool. And neither Boxer nor Usave generates any of their significant turnovers via e-commerce.

And even if grocery e-commerce were to hit 30% of total grocery revenue (this is the most common estimate I get when I ask people to take a guess), this would mean that every third till in EVERY grocery store in the country would be pumping out ONLY e-commerce purchases bound for delivery by the branded motorbike brigade (who in turn would need to number in their dozens of thousands).

So FMCG e-commerce locally is still small – why are we bothering?

Growth. Our R13.9bn estimate factored in a +44.1% year-on-year growth. And that’s not to be sneezed at. And yes, while growth rates have already started moderating as the market ‘matures’ (although Checkers Sixty60 as the ‘old man’ of local on-demand e-commerce is barely five years old…), indicators of future growth are all positive.

Mainly, retailers are still actively in ‘growth’ mode:

• Rolling out improved apps
• Rolling out e-commerce offerings to more stores
• Actively targeting previously underserved township areas (SPAR2U, Sixty60)
• Expanding products available to include general merchandise (Sixty60, Pick n Pay asap!) and prescription drugs (Zulzi)
• Offering marketplace services to suppliers (Makro)
• Offering subscription services (Sixty60, Takealot)
• Punting grocery ‘click and collect’ (Pick n Pay, Woolworths)
• Investing in dark stores (Sixty60, Woolies Dash)
• Bringing ‘online group buying’ to grocery shopping (SolShop)
• Offering flexibility in how bundles are constructed (GooGro)
• Getting into live shopping (Pick n Pay asap!)

Beyond what the FMCG e-commerce players are up to, there are positive forces supporting the ecosystem, too.

• New international players like Shein and Temu are growing the overall e-commerce market, potentially being a ‘gateway drug’ for online grocery shopping (just like tea is a gateway drug for biscuits…)
• In our surveys of online shoppers, the majority say they plan to shop online (for groceries and beyond) more in future
• Digital access and infrastructure are still improving, which will facilitate access to online shopping for more people
• Grocery shopping is starting to leverage the power of social media

In a nutshell, we’re positive that FMCG e-com will continue to … well… deliver … growth.

For more on the e-commerce channel generally, its size, growth forecast and shopper insights, refer to the Trade Intelligence E-commerce Channel Report.