South Africa’s e-commerce sector is projected to generate more than R130 billion ($7 billion) in sales in 2025, representing nearly 10% of national retail turnover, according to a new Online Retail 2025 Report by World Wide Worx, in partnership with Mastercard, Peach Payments, and Ask Africa.

The report shows that online retail is expanding at a much faster pace than traditional retail, with sales growing 35% in 2024 to reach R96 billion ($5 billion) and expected to rise by a similar margin this year.

Takealot remains South Africa’s most-used online platform, alongside Shoprite’s Checkers Sixty60, Pick n Pay, Woolworths, and the Foschini Group’s Bash. However, the entry of international giants is reshaping the market. Amazon launched its South African marketplace in 2024, expanding into groceries and household goods while opening a seller centre for SMEs in Cape Town. Shein and Temu captured an estimated R7.3 billion in sales last year, accounting for about 40% of online clothing purchases. Their growth is now being slowed by new VAT and customs rules, which are closing import loopholes.

Despite the global competition, local retailers are maintaining strong performance by focusing on faster delivery, easier returns, and higher consumer trust. The report notes that 65% of retailers said they felt little impact from Temu or Shein, while 75% rated their service capabilities higher than those of international players.

Young, urban South Africans aged 18 to 34 remain the core demographic of online shoppers, but middle-income and older consumers are increasingly active. Middle-income households are now the fastest-growing buyer segment. Women dominate grocery and fashion purchases, while men are more active in electronics and general retail. Everyday essentials, particularly groceries and fast-moving consumer goods (FMCG), are leading growth, with services like Sixty60, Pick n Pay Online, and Woolies Dash driving demand.

Debit and credit cards, along with EFT, remain the most widely used payment methods, though instant EFT via PayShap and Buy Now, Pay Later (BNPL) options are gaining popularity. WhatsApp has become an important channel for engagement, with 69% of retailers using it for customer support and over half for promotions. However, only about 16% of transactions are completed through WhatsApp payment links, with most customers preferring EFT invoices due to concerns about integration, fraud, and security.

Artificial intelligence is beginning to enter the e-commerce space, but remains in its early stages. Retailers currently use AI mainly for marketing, though future applications are expected in fraud detection, demand forecasting, and dynamic pricing.

By 2027, South Africa’s online retail sales are expected to account for 12% of national turnover, cementing e-commerce as a structural force in the country’s economy. Rahul Jain, co-founder of Peach Payments, said the next phase will be the “democratisation of e-commerce”, extending access to products and services not just in cities but also in remote regions.