SA’s R130bn e-commerce boom sparks fears of retail sector job losses

The numbers signal a new era of opportunity, but a closer look reveals persistent gaps — both digital and economic — that threaten local jobs and expose vulnerabilities in an unevenly connected market.

Speaking at the launch of the Online Retail in South Africa 2025 report — produced by World Wide Worx in collaboration with Mastercard, Peach Payments and Ask Afrika — Arthur Goldstuck, CEO of World Wide Worx, called it a turning point: “Online retail has moved from being an experiment on the margins to a structural force in the economy. Sales grew 35% in 2024 and are projected to rise 38% in 2025, far outpacing the slow crawl of traditional stores.” Goldstuck adds that the evidence is “overwhelming that e-commerce is now the growth engine of South African retail”.

A ‘smash-and-grab’ economy

This boom doesn’t come without tension. International platforms such as Shein and Temu are gaining ground, creating a real challenge for local manufacturers and retailers. A 2025 study by the Localisation Support Fund (LSF) found that by 2024, an estimated 8,100 local jobs — two-thirds in retail, one-third in manufacturing — had not materialised due to offshore competition. If these trends continue, the number could rise to 34,000 by 2030.

Simon Eppel, director of research at the SA Clothing and Textile Workers’ Union, warns that cheap imports are “depressing the prices that local retailers can charge”, calling it a form of “smash-and-grab economics”. Government measures, such as removing VAT exemptions and increasing customs duties on low-value parcels, have helped.

Read more: Customs duties: taxing times for Shein and Temu shoppers

But the LSF reports that enforcement gaps remain.

Still, the impact is uneven. The World Wide Worx report notes that 65% of South African retailers report little to no effect from Shein and Temu, while 75% rate their own e-commerce capabilities as “better or significantly better” than international rivals. While many local firms hold their ground, the cumulative effect on jobs and local suppliers remains a concern.

The digital divide

The e-commerce boom isn’t reaching everyone. A 2025 GSMA report shows that while mobile internet covers 96% of the world’s population, 3.1 billion people remain offline. In sub-Saharan Africa, that number rises to 65%, leaving millions of potential consumers disconnected.

Affordability is a major barrier. Entry-level devices can cost up to 16% of a monthly income in low- and middle-income countries, and inequalities persist: women are 14% less likely than men to be online, and rural populations are 25% less connected than urban ones. According to the GSMA, a device costing just R521 ($30) could bring connectivity to 1.6 billion people currently offline.

Vivek Badrinath, director-general of the GSMA, frames the challenge by stating that “the time has come to drive more meaningful progress”. He adds that without affordable devices, rural communities and women risk being further marginalised from the economic benefits of online retail.

How retailers are fighting back

Speaking during a live Zoom discussing the online retail in South Africa report’s findings, Rahul Jain, CEO of Peach Payments, said that in the near future we will see AI agents “playing a role in online shopping and retail”, and that this is a key part of “agentic commerce”. The challenge for retailers, Goldstuck said, is to become “findable by AI” through what he calls “generative engine optimisation”, which he describes as “the biggest disruptor in search since Google first went public”.

According to the report, artificial intelligence (9.0%) and drop-shipping (7.5%) are used by a minority of retailers, while automated payouts (2.5%) and virtual/augmented reality (1.0%) remain niche. Just 4.5% report using none of these strategies, a drop from last year, indicating that adoption of at least one technology is now nearly universal. 

Jain also highlights WhatsApp commerce as the new “face-to-face interaction” channel. Small and medium-sized businesses can engage customers and close sales in real time — a blend of personal service and digital convenience that could redefine how e-commerce operates.

Read more: Gen Z’s digital takeover of SA’s payments industry

A collective challenge 

The opportunities come with risks, underscoring the need for coordination. Irshaad Kathrada, CEO of the LSF, says the projected 34,000 job losses should serve as a “wake-up call” for regulators and industry. He argues that “e-commerce doesn’t have to come at the cost of local industry”, and calls for an industry-wide programme aligning retailers with local manufacturing to protect jobs while sustaining growth.

Badrinath echoes this, urging a “concerted, collaborative effort between the mobile industry, device makers, policymakers and financial institutions” to make devices affordable and close the digital divide. Only by addressing both technological and social barriers can South Africa fully realise the promise of online retail. DM