In the first phase that could lead to the consolidation of South Africa’s fragmented ecommerce sector, online clearance marketplace, Going.co.za, on Tuesday said it had bought another market player, Diligo.co.za, for an undisclosed sum.

The takeover of minor online retailers is set to increase in South Africa as the market is being consolidated, the Chairman of Going.co.za, Paul Greenberg, advised on Tuesday.

“This no man’s land will be a challenge for e-commerce finding scale,” Greenberg said.

“We saw the same thing in Australia and the United Kingdom, three years ago, where there was a proliferation of e-commerce spending big money building loyal customer following but as private equity funds dried up the lack of profitability caused a speedy market consolidation. The smaller players struggled to find momentum and either closed down or sold out to the bigger ones,” Greenberg continued.

The acquisition of Diligo.co.za comes after the dispatching of the MasterCard Worldwide Online Shopping Survey, which has shown a substantial increase in the number of South Africans engaging in online shopping.

The survey shows that 58 percent of respondents now use the Internet for online shopping. This is an increase from the 44 percent in 2009, and 53 percent in 2010.