South Africa online

 

About 10.5% of all South Africans have access to the internet, or 4.59-million people, over a third of them – the majority – aged between 18 and 29.

The country has 5.3-million personal computer users, making up 11% of the total population. Its online market is dominated by information and social networking websites, according to web information company Alexa, which lists Google.co.za as the top site, followed by Facebook.

The top web brand in South Africa is News24, followed by MSN.

South Africa’s online advertising industry is worth R319-million and growing rapidly, online retail generates R688-million in sales, and online air ticket sales R3-billion.

There are roughly 26 000 South African blogs, read by over 600 000 people.

Sections in this article:

Internet access

At the end of 2008 roughly 10.5% of South Africans had access to the internet: a total of 4.59-million local web users, or one in 9 people in a population of 43.79-million. This represents a growth of 12.55%, the biggest since 2001.

This is according to Internet Access in South Africa 2008, a report released in March 2008 by World Wide Worx, South Africa’s most authoritative electronic communication research company.

South Africa’s web users connect to the internet in four ways:

  • Fixed-line narrow-band dial-up via conventional telephone lines, provided by Telkom
  • Fixed-line broadband via asymmetric digital subscriber line (ADSL) connection, provided by Telkom and a third-party internet service provider (ISP)
  • Wireless broadband via GPRS, 3G or HDSPA technology on cellular-phone networks, provided by local mobile-phone service providers MTN and Vodacom
  • Wireless broadband provided by iBurst, from WBS, and other ISPs.

Fixed-line dial-up connection has long been the most-used form of internet access in South Africa, which has lagged behind more developed countries’ uptake of broadband.

But broadband is set to take over, especially with Seacom, the first of the major new undersea cables, coming into operation in mid-2009. World Wide Worx predicts that dial-up will be all but phased out at this point – dial-up has already dropped from its peak of 1.08-million in 2004 to 700 000 in 2008. Broadband subscriptions, on the other hand, soared from 818 000 in 2007, to 1 308 000 in 2008; a growth rate of 60%.

“Once everyone who is connected is on broadband or high-speed networks, the Internet will come into its own as an environment for business collaboration and personal interaction,” says World Wide Worx managing director Arthur Goldstuck.

“Broadband has not yet made a major impact on overall connectivity numbers, even while dramatically increasing the usage of those who are already connected,” adds Goldstuck, who has been tracking the internet market since 1993. “The majority of broadband users are simply migrating up the connectivity food chain, from dial-up to broadband.”

Telkom’s ADSL offering has been the main driver of broadband adoption in South Africa for the last four years, but has been overtaken by wireless broadband subscriptions, which now outnumber ADSL by 750 000 to 558 000 in 2008. World Wide Worx predicts that ADSL will continue to be the principal form of connectivity for most broadband users until the latter part of 2009.

The study shows that the only broadband offering attracting large numbers of new users, rather than upgrading existing users, is iBurst. Until now the growth of iBurst has been held back by availability, but through its relationship with Vodacom it is expected to make a dramatic impact over the next two years.

Internet users

According to Nielsens Netratings research, published by the Online Publishers’ Association, the user base is becoming more male-dominated, with 58% of South Africans online in December 2008 being male, as opposed to 55% in December 2007. This represents an increase of 3.2%.

The audience is also ageing slightly, with the older demographic groups increasing their share the most; with a 0.6% increase, the 50+ group saw the greatest increase.

Some 22% had a degree, 15% a postgraduate degree, and 17% had a household income of over R400 000.

Computer access

South Africa has 5.3-million personal computer (PC) users, or 11% in a population of 47.85-million – one computer for every nine people.

This is according to PC Users in South Africa 2006 , a study released in June 2006 by World Wide Worx.

The study was conducted by Arthur Goldstuck and Kirsty Laschinger. Its approach was to move beyond a conventional tally of computer sales to establish how long PCs, laptops and servers remain in use once they have entered the market, and how many are in active use. For the first time, this has provided a clear picture of the size of South Africa’s PC user base.

“PCs have a life span ranging three to six years, while laptop computers tend to be used for only up to three years,” says Laschinger, who interviewed most of the country’s major PC manufacturers and distributors for the project.

“It was an eye-opener how many vendors of computers expect all users to replace their PCs every two to three years, when the reality is many users ‘sweating their assets’ to get maximum value from the purchase.”

Booming sales in PCs mean not only more people using new computers, but also that PCs already in the field remain in use for a longer period, further boosting the user base. But this trend may change once laptop computers overtake desktop PCs in popularity – a real possibility in the next few years.

“Laptop computers cannot be upgraded as easily or as cheaply as desktop PCs, so they have a shorter useful life,” says Goldstuck. “You can upgrade a PC bought more than five years ago to accommodate current software, but it’s unlikely you could do that with most laptops. The result is that old laptops are more likely to be discarded than passed on, while old PCs are more likely to have a second life once the user upgrades.”

The net result is that booming laptop sales will not have the same cumulative effect on the total user base as do PC sales. Nevertheless, growth will continue, but at a slower pace, in the years to come.

Factors that will drive this growth include:

  • Continued strong economic growth
  • The emergence of the black middle class
  • Improved education levels, including computer literacy
  • The evolution of the distribution channel
  • Improved affordability of PCs, both as a result of cheaper product and new financing options
  • Convergence of voice and data
  • Technology improvements
  • Demand for more server/ storage capability to meet higher levels of corporate governance requirements.

Top websites

The Online Publishers’ Association (OPA) represents South Africa’s top mainstream commercial website publishers.

Membership is restricted to internet publishers who:

  • are dedicated to building a sustainable online publishing business
  • publish original content on the internet
  • use online advertising and sponsorship as their primary sources of income
  • are committed to best practice in online publishing

According to the OPA, in the second quarter (April to June) of 2007 the top 20 websites in South Africa were:

TOP 20 COMMERCIAL WEBSITES
Rank Website Publisher Unique browsers Active Reach
1news24.com Media24 980 69021%
2MSNMSN705 78415%
3mweb.co.za MWeb647 89214%
4webmail.co.za Interface 593 29213%
5HotmailMSN573 52712%
6iol.co.za Independent Online556 44712%
724.comMedia24 487 43810%
8fin24.co.za Media24 289 9836%
9careerjunction.co.zaCareerJunction279 4776%
10health24.co.za Media24 260 6796%
11iafrica.com Primedia Online257 7146%
12yellowpages.co.zaYellow Pages South Africa253 4115%
13ananzi.co.za Ananzi238 4155%
14Autotrader.co.zaAuto Trader233 4615%
15Mail & Guardian Online M&G Online208 6134%
16wheels24.co.za Media24 195 9234%
17supersport.co.za SuperSport Zone187 3694%
18women24.comMedia24 178 6104%
19The TimesAvusa165 7994%
20Junkmail-zaJunkmail164 2274%

Online advertising

Online advertising in South Africa grew at the fastest rate of all countries in the English-language world in 2008, and is likely to repeat this performance in 2009. This is according to the Online Media in South Africa 2009 study, conducted by World Wide Worx in collaboration with the OPA.

The findings indicate growth of 32% in online advertising in 2008, after 27% growth in 2007. Actual online advertising spend in 2008 reached R319-million, from R240-million the year before. This is in line with a 2006 study by World Wide Worx, which foresaw that online advertising spend would pass R200-million in 2007. The robust growth, according to the study, is indicative of growing confidence in the online medium.

OPA chair Adrian Hewlett attributes the growth to three key trends:

  • Increased awareness of the inherent potential of online advertising has resulted in a growing pool of online advertisers;
  • There has been a considerable boost in digital adoption by traditional media buying and creative agencies, as well as new specialist agencies;
  • Additional publishers have entered the market, further promoting the online proposition and maturing the online advertising market.

Another interesting trend that has emerged, is that online advertising spend is set to overtake that of the cinema. The growth forecast for 2009 is 32% for online, while advertising growth in cinema will show very little movement.

“While online economics in South Africa are different to those of traditional commerce, there is little doubt that a recession in the physical world would make itself felt in the online environment, but the 2009 expectation shows how robust this sector remains,” says Goldstuck.

This significant development will further encourage traditional buying agencies to embrace the online medium.

The 2008 study also showed that the only other mature Internet market where online advertising appears to be growing faster than South Africa is Brazil. The South American country shows a massive 45% growth for 2008.

Other English-speaking markets which traditionally had outpaced South Africa in 2006 and 2007, such as the US, UK, Canada and Australia, declined during in 2008. None managed to achieve 30% growth – growth in the US was a meagre 11% and in the UK growth fell to 22%. Neither country is expected to break through 10% in 2009.

Rich media banners – ads that allow the user to interact with them – share top position with the static banner in terms of revenue generating advertising in South Africa.

Online retail

By the end of 2007, online spending on retail goods in South Africa is expected to have grown by more than 35%, after 33% growth in 2006.

The total spent on online retail goods in South Africa in 2007 is expected to be R929-million, up from R688-million in 2006, according to Online Retail in South Africa 2007 , a report released by World Wide Worx in October 2007.

These figures exclude the sale of air tickets online, which continue to dwarf the numbers for online retail. The five South African airlines selling tickets online, namely kulula.com, FlySAA.com, Mango, and 1Time between them accounted for R2.3-billion in e-commerce in 2006, almost four times the size of conventional online retail. The figure is expected to rise above R3-billion in 2007.

These numbers indicate a dramatic turnaround in online retail in South Africa, which appeared to be stagnating in 2005. The 2006 recovery is being sustained in 2007, with all indications being of even more dramatic growth in 2008.

The number of online retail sites has also grown substantially, from 826 in 2005 to 1014 in 2007. This growth has come despite 310 sites – more than a third of those online at the end of 2005 – closing down from 2005 to 2007. However, no less than 498 new sites came online during this time.

The online retail market is dominated by 12 sites, which between them account for more than three quarters of online retail sales in South Africa, according to World Wide Worx. They are:

Blogging in South Africa

There were a total of 26 197 blogs in South Africa at the end of December 2007, compared with 25 037 blogs just four months before. 

World Wide Worx research shows that for the period of January to March 2008, the following activity was reported on South African blogs:

  • Number of blogs (December 2007): 26 179
  • Active blogs: 3 789
  • Percent of active blogs: 14.5%
  • Monthly posts for January 2008: 48 120
  • Average monthly page views in 2008: 5 226-million
  • Monthly page views for January 2008: 10 448-million

The key moments, says Goldstuck happened in 2007, and they were the launches of Afrigator, the continent’s first blogging aggregator; Amatomu, the first comprehensive tracking service for blogs and bloggers in South Africa; My Digital Life by ITWeb, which put solid commercial resources and interests behind blogging; and The Times, the first mainstream newspaper to embrace blogs and the social networking environment.

As a result, he adds, it is clear that blogging is no longer just a fad, as indicated by the explosion of activity that occurred in July and August 2007. This represents a true tipping point for the phenomenon.

According to Afrigator, South Africa dominates the African blog space, with nearly three in every five blogs attributable to the country.

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