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South Africa’s e-commerce sector is on track to surpass R130 billion in turnover by the end of 2025, capturing nearly 10% of the country’s total retail market, according to new research.

The Online Retail in South Africa 2025 report (PDF), produced by World Wide Worx with Mastercard, Peach Payments and Ask Afrika, shows the scale of the shift. Online sales grew by 35% in 2024 to R96 billion, or 8% of retail trade. That momentum has accelerated through 2025, with digital commerce expanding at an annualised rate of 38%, compared with growth of just 2.5% in physical retail last year and 1.6% so far this year.

Arthur Goldstuck, chief executive of World Wide Worx, described the findings as a turning point. “The transformation of this market over the past decade has been extraordinary. Online retail has moved from being an experiment on the margins to a structural force in the economy. Nearly one in every ten rand spent at retail will now be online,” he said.

He added, “What is most important is not just the pace of growth but the breadth of it: we are seeing double-digit increases across groceries, fashion, health and beauty, and value retail. The evidence is overwhelming that e-commerce is now the growth engine of South African retail.”

And retailers are already reporting the benefits. Shoprite’s Checkers Sixty60 grew by 47% in the first half of 2025, generating almost R19 billion in sales. Pick n Pay’s delivery services expanded by more than 60% in its latest financial year. Woolworths posted a 37% rise in online sales for fashion, beauty and home products, alongside nearly 50% growth in its grocery delivery service Woolies Dash. The Foschini Group said its Bash platform was up 40% and now contributes 12% of group turnover, while Truworths’ online sales grew 38% to reach 6% of its South African trade. Mr Price and Clicks also saw double-digit online gains from smaller bases.

Payments are central to the boom, according to Mastercard’s South Africa country manager, Gabriel Swanepoel. “The growth of online retail reflects the combination of consumer trust and reliable payments. Secure, seamless transactions are what allow retailers to scale at speed and consumers to shop with confidence,” he said.

Swanepoel added that growth is spreading beyond urban hubs. “Momentum is no longer limited to major cities. It is in smaller towns and among middle-income households as connectivity improves and secure payments open access. This shows how digital inclusion is expanding opportunity well beyond traditional retail hubs.”

The report also included the impact of global entrants to the market. Shein and Temu generated an estimated R7.3 billion in sales in 2024, giving them 3.6% of the clothing, textile, footwear, and leather (CTFL) market and close to 40% of online sales in the sector. Tighter customs enforcement and the closure of VAT loopholes have eroded their price advantage, and their rapid growth is expected to moderate in 2025.

Amazon launched its South African site in May 2024 and has since expanded into groceries, pet food and health supplements. In January it opened a walk-in seller centre in Cape Town to support local SMEs.

Rahul Jain, chief executive of Peach Payments, said the report shows the industry has entered a new phase. “Online retail has reached a stage where maturity matters as much as momentum. South African retailers are no longer only testing e-commerce; they are scaling it profitably,” he said.

Jain argued that the next stage will be driven by consumer loyalty. “Convenience and speed brought consumers online during the pandemic, but loyalty will be built on experience. That means seamless checkout, predictable delivery, and trust in every transaction. These are the areas where South African retailers are now investing, and it is why we believe the next wave of growth will be even more sustainable.”

The report forecasts that by 2027 online retail will exceed R150 billion and account for 12% of all retail turnover, cementing its role as the structural driver of growth in the sector.