Homechoice dominates the South African homeshopping market with a 28% value share

Press Release   •   Jun 12, 2013 10:39 BST

The South African homeshopping market increased by 7% in current value terms through 2012, to reach a value of R4.1 billion.

There was a general slowdown in volume sales within homeshopping during 2012. Consumers‟ focus shifted towards store-based retailers, as they were watching their spending. Companies such as Verimark saw their value sales drop during the year when compared with 2011, when bumper growth was recorded.

The retailer Homechoice helped to boost sales in the overall channel, as it recorded value sales of almost R1.2 billion during 2012.

The overall growth in the channel during 2012 was mainly attributed to the growth in the number of middle-income consumers, who fall within the target market of most homeshopping retailers in South Africa.

In terms of the success of advertising media, TV shopping has been said to reach more people compared with catalogue shopping; however, in terms of customers who follow up on a TV advertisement to make a purchase, only 18% of viewers then proceed to purchasing the products, and considering the cost of TV shopping, most homeshopping companies are investing in catalogue shopping, which has long-lasting appeal, as customers can always refer back to the catalogue, and this has yielded results for companies such as Homemark South Africa, which was in third place in terms of value share in 2012.

The huge growth in internet retailing led to an improvement in terms of marketing tools, which helped to stimulate sales growth for homeshopping. Retailers in homeshopping used social sites such as Facebook and Twitter to create awareness of the products on offer.

Other retailers bought customer e-mail databases, and sent random potential customers e-mails informing them of the products on offer, as well as how they can be obtained; hence sharp growth was enjoyed in sales.

Homechoice led homeshopping in 2012, with a value share of 28%. The company was successful due to its intensive investment in catalogue design and distribution countrywide. Verimark was in second place with a value share of 11%; this was a slight decline when compared with the previous year, when its share was 12%.

Despite an increasing number of South Africans acquiring internet and telephone access, with growing penetration of mobile phone contracts and 3G connectivity, South Africans still prefer to purchase goods from traditional stores.

Whilst the majority of homeshopping companies in South Africa only have product availability in certain retail outlets, Verimark has chosen not only to go down this route, but also to have branded stores, greatly boosting sales. The success of these stores indicates that South Africans do not greatly support homeshopping.

For more information on the South African homeshopping market, see the latest research: South African Homeshopping Market

Follow us on Twitter @CandMResearch issues news updates and report summaries covering all major industries and sectors. The service provides additional client monitoring and timely alerts to breaking industry and sector news leading the day's business headlines. News articles, written by our staff, contain additional analyst insight, providing value added insight for our readers. News updates and real-time alerts on newly-released market reports are also available from our Facebook page, Twitter feed @CandMResearch and RSS links. We also welcome inquiries from business journalists and the news media.