Naspers subsidiary Takealot is on a national drive to entice thousands of people in townships around the country to join its e-commerce platform as shoppers, sellers and delivery drivers.
The company’s township economy programme was launched in Gauteng in the first quarter with a target to train 2,000 delivery drivers and 5,000 personal shoppers to buy products on the Takealot platform on behalf of the public. It is also looking to add hundreds of independent restaurants to the Mr D food delivery platform.
Speaking at the release of Naspers report into the digital economy in South Africa, the minister of trade, industry & competition, Parks Tau, said the programme, about to be launched in Mpumalanga, was designed to create employment, increase earnings potential and improve market access for individuals and businesses, particularly those in the townships.
“This national expansion marks a significant step towards empowering historically disadvantaged communities, re-industrialisation and fostering inclusive economic growth. This initiative will also help overcome oppressive-legacy spatial planning, ensuring that economic opportunities are accessible to all, regardless of location.”
Online retailers and linked delivery services are rapidly expanding, with Takealot and other platforms such as l Mr D Food, TFG, Checkers Sixty60, UberEats, Shein, Temu and Amazon all proving popular. Banks have adopted digital transacting, making it easier for customers to bank and shop online.
Naspers, in partnership with the Mapungubwe Institute for Strategic Reflection (Mistra) think-tank, conducted research into South Africa’s digital economy, including e-commerce, that found it could contribute as much as R91.4bn to the economy by 2035. This would boost its slice of the economy from a modest 0.02% in 2022 to 1.38%.
Naspers South Africa CEO Phuthi Mahanyele-Dabengwa told Business Times the rollout of Takealot’s township economy programme will be “critical”.
“Through that project, we will be reaching moms and dads who are selling on the side of the street. They can now sell their products on our platform and have access to a wider customer base. We want to see those small informal businesses on the streets growing to become significant businesses. Moreover, we also want to make sure that we can employ as many South Africans as possible.”
According to the Naspers-Misra report, small to medium enterprises (SME) contribute between 30% and 40% of GDP. However, those operating in townships and rural markets are predominantly informal and lack a strong focus on manufacturing competitive products and delivering digital services.
The report called for greater SME participation in the digital economy so such businesses could grow through exploiting more diverse market opportunities.
It said incentives targeted at local small-scale producers and service providers that can supply “globally relevant and competitive products on e-commerce platforms” should be developed.
This would “enhance access to relevant well-priced products and services to the rural and informal communities ... [and] ensure that the base of the pyramid is served and will support the growth of the digital platform economy”.
The report calls for more investment in early-stage start-ups in the digital economy, while working with incubators and accelerators to ensure the investment and compliance readiness of these start-ups.
There are vast opportunities before us and it is clear that a thriving digital platform economy could bring enormous value to South Africa
— Joel Netshitenzhe
Mahanyele-Dabengwa said funding was still a challenge for SMEs. “Entrepreneurs in South Africa don’t have access to affordable capital. In other markets, you have venture capitalists who fund start-ups as they understand the risks that entrepreneurs go through. Their funding is a lot more amenable for entrepreneurs.”
She said while some private companies and other organisations were taking risks and funding small businesses, there was a need for more interventions, especially by development finance institutions.
“The reality is that entrepreneurs need access to capital. South Africa is dry when it comes to capital, and so that is one of the areas that we are certainly looking at right now,” she said.
"[Naspers] can’t preach the need for funding and not do anything. I think when people see us putting money into it, it also increases confidence levels in the country and start-up community and other companies may follow.”
According to the report, Takealot, Mr D and other Naspers companies — Superbalist, AutoTrader, Property24 and PayU — have generated more than R13bn in economic value, including R1.5bn in household income.
The report noted that the demand for digital skills was growing rapidly, and South Africa needed to double the number of graduates in the STEM disciplines — science, technology, engineering and mathematics — if it wanted to be globally competitive. STEM students now account for just 18% of total graduates. In leading tech countries such as India, the UAE and South Korea, this figure exceeds 30%.
Solly Malatsi, minister of communications & digital technologies, said South Afruca was “only scratching the surface in terms of the value [the internet] can unlock”.
South Africans were too inclined to use the internet to connect on social media and for entertainment, rather than using it for economy-related purposes, such as online employment, accessing government services and engaging with professional services.
“This tells us that the capabilities and benefits of digital technologies are not fully realised, and that there is still much more work to be done to fulfil South Africa’s digital literacy ambitions,” Malatsi said.
“So as digital platforms address customer needs across a wide variety of sectors, the latent demand represents a challenge as well as an incredible opportunity that we can unlock.
“There are millions who have access to the internet but are not yet currently using it for much more other than social networking and to a much less extent, online banking. If digital platforms can develop offerings that are relevant, that serve lower-income communities, there’s room for growth beyond middle-income consumers,” the minister said.
The Naspers-Misra report urged the government to regulate digital platforms in line with the country’s level of maturity and development. There was a need to encourage innovation by creating “regulatory sandboxes” to enable small and fledgling platforms to operate in a controlled environment with concessions that encourage growth and innovation.
Joel Netshitenzhe, the executive director of Mistra, said the digital-platform economy could drive inclusive and transformative growth, unlocking opportunities for millions of South Africans eager to engage in this dynamic sector.
“There are vast opportunities before us and it is clear that a thriving digital platform economy could bring enormous value to South Africa. While the foundational elements are in place, significant barriers remain that hinder society from realising this potential. The encouraging central message of the report is that solutions are within reach, but they require urgent collaboration and bold actions from all stakeholders.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.