Democratising digital advertising and e-commerce in South Africa

Abstract

The digital advertising and e-commerce industries are experiencing exponential growth on a global scale. The population is becoming increasingly more digitally connected via the internet, as recent stats show that nearly 80% of South Africans used the internet in 2022. (Statista, 2024) There is, therefore, a rapid shift in consumer behaviour in terms of how the market consumes advertising and interacts with retailers. In the past, consumers learned about brands, products and services through offline advertising, such as magazine or TV ads, and then typically purchased them in physical stores. However, as consumer behaviour shifts toward digital platform adoption, brands are now investing heavily in digital marketing channels such as social media, paid search and SEO. Digital advertising spend has already overtaken traditional advertising in 2021 and is expected to account for 66% of total advertising spend globally. (Solomons, 2023). Consumers are also increasingly adopting online shopping across the globe. South Africa is experiencing unprecedented growth across both digital marketing and e-commerce markets. South Africa is forecasted to increase its e-commerce users from 27 Million in 2022 to 37.9 Million in 2027, whereas its digital advertising market is anticipated to reach USD 719.0 Million in 2024. (Statista, 2024). The challenge with the shift from offline to online channels in the South African market is that a few international ad tech giants, such as Google and META, dominate the digital advertising market. These tech giants, therefore, subsequently acquire a majority of the market share that South African companies previously held; this shift in market share from local to foreign companies may lead to issues such as job losses and media venture failures in the local economy. International e-commerce giants are also entering the South African market due to the lucrative growth in this segment. Grounded theory-based interviews were conducted to gather qualitative insights into strategies South African companies and their population can implement to remain competitive and access economic growth opportunities in these two markets, leading to potential local self-employment and sustainable business prospects.