JOHANNESBURG, Sept 11 (Reuters) - South Africa's online

retail turnover is expected to top 130 billion rand ($7.42

billion) this year and account for 10% of total retail sales,

driven by on-demand grocery and fashion, as well as the entry of

global competitors such as Amazon ( AMZN ), a study shows.

Online retail sales grew by around 35% in 2024 to an

estimated 96 billion rand and accounted for roughly 8% of all

retail trade in South Africa, according to the study released on

Thursday by World Wide Worx in collaboration with Mastercard,

Peach Payments and Ask Afrika.

The fastest and most visible growth remains in grocery

retail, where the shift to digital has been accelerated by the

adoption of on-demand shopping apps of market leader Shoprite

and its peers Pick n Pay and Woolworths

.

Meanwhile, growth in online fashion sales is being driven by

retailers investing in digital platforms, with better user

experiences, improved size and fit guidance, said Arthur

Goldstuck, CEO of World Wide Worx, a research firm.

"Online retail has moved from being an experiment on the

margins to a structural force in the economy. Nearly one in

every 10 rand spent at retail will now be online," he added.

The arrival of Amazon ( AMZN ) last year has also fuelled growth. The

U.S. retailer is now used by 12.3% of online shoppers after

Shein and Temu, with a collective 15.3% at second place. Market

leader Takealot is used by 31.9% of shoppers, according to the

report.

Shein and Temu made rapid inroads in 2023 to 2024, reaching

an estimated 7.3 billion rand in turnover and an almost 40%

share of online clothing sales in 2024. However, the closure of

tax loopholes, stricter customs enforcement and the resilience

of local retailers have moderated their impact, Goldstuck said.

"Their growth is now expected to slow, suggesting

coexistence with, rather than displacement of, established

players," he said.

($1 = 17.5243 rand)