An estimated 20% to 30% of the surge in e-commerce spending brought about by the Covid-19 pandemic and related lockdowns and restrictions last year is expected to become a permanent feature of the overall retail market, global payments technology company Mastercard says.

The latest Mastercard Economics Institute report, ‘Economy 2021’, which analyses the economic impact of Covid-19, including permanent changes in digital consumer spending habits, the growth of online banking, financial technology (fintech) disruption and opportunities to boost financial inclusion, shows that there is a permanent shift to digital platforms.

The sharp shift to digital platform use was driven by changed consumer behaviour, mobility restrictions and the necessity to generate business revenues beyond traditional brick-and-mortar locations.

The study reveals that 68% of South African consumers are shopping more online since the onset of the Covid-19 pandemic, a trend that is likely to continue as indicated by the 71% of the respondents that said they will continue to shop online post-Covid-19.

E-commerce adoption by older generations, along with the added convenience and lower costs for consumers, will contribute to the continued growth of digital demand in 2021.

This growth also provides an opportunity to boost financial inclusion in the Middle East and Africa (MEA) region with high fintech disruption across Africa, says Mastercard South Africa country manager Suzanne Morel.

“This is especially relevant in regions such as East Africa, where International Monetary Fund research found that, even where financial inclusion through traditional banking services was declining, expanded access to digital tools and services increased financial inclusion.”

This will continue in 2021, particularly in the more digitally advanced economies, such as Ghana, Kenya and Uganda.

The Mastercard e-commerce study also notes that 76% of South African respondents learnt to bank online during the year.

Meanwhile, the ‘Economy 2021’ report highlights that another aspect of advancing financial inclusion is leveraging cutting-edge technologies to connect consumers to small businesses and micromerchants.

“Brick-and-mortar business creation is expected to decline further in 2021 in favour of online business creation and the adoption of initiatives that connect a merchant’s sales data with access to capital.

“As digital innovation improves and Internet access increases, digital payment solutions such as contactless, virtual card numbers and quick response codes offer more possibilities than ever before.”

A key success factor for regional economies when it comes to leveraging the growth of e-commerce and advancing financial inclusion is the young and fast-growing populations across the MEA, says Mastercard Asia and MEA chief economist David Mann.

“Africa is home to 19 of the world’s 20 youngest countries. “As millions of young consumers become mobile users for the first time GSMA anticipates sub-Saharan Africa to cross a 50% penetration rate of unique mobile subscribers by 2025,” he explains.

However, there are associated risks as high unemployment, high youth unemployment and social unrest are likely to remain a challenge in 2021.

“This growth of the digital economy represents a coming of age for e-commerce, a turning point in bridging the digital divide. We are heading for a multi-speed global recovery that favours low-touch over high-touch,” he concludes.