Naspers, a leader in South Africa’s digital ecosystem, anticipates that e-commerce and other digital platforms will contribute R91.4 billion ($5 billion) to the economy by 2035.
This projection could see the sector contributing 1.38% to the country’s GDP within the next decade, according to research conducted by Naspers and the Mapungubwe Institute for Strategic Reflection (MISTRA).
Naspers, which owns South Africa’s top online retailer, Takealot, has been aggressively expanding its services, including the introduction of one-hour delivery options for a range of products, from phone chargers to toys. This move is part of Naspers’ strategy to strengthen its competitive position against Amazon, which entered the South African market in May 2024.
Despite the growth potential, South Africa’s GDP has expanded by an average of less than 1% over the past decade, largely due to energy shortages and deteriorating infrastructure. However, Naspers, under the leadership of its new CEO, Fabricio Bloisi, aims to transform its e-commerce business into a major revenue generator.
Bloisi, who previously built out the food delivery business iFood, has already seen success, with Naspers’ e-commerce division reporting its first full-year trading profit of $38 million for the year ending 31 March 2024.
MISTRA’s senior researcher, Machete Rakabe, suggests that the R90 billion-plus economic contribution could be realized even sooner if South Africa can increase its current growth rates to around 3%. Rakabe emphasized the importance of improving infrastructure, including the expansion of data centers and the implementation of digital identity documents, to ensure broad access and support the digital economy.
South Africa’s economic performance has been hindered by its failure to fully capitalize on its youthful population and one of the largest upper-middle-income markets in the region. Currently, digital platforms contribute approximately R5 billion to the economy, but Rakabe believes this figure could grow substantially with the right reforms and investments.
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The recent formation of a government of national unity, following the ANC’s loss of its parliamentary majority in the May 29 elections, could potentially catalyze these needed reforms. Naspers South Africa CEO Phuthi Mahanyele-Dabengwa expressed optimism, stating, “There is a renewed sense of energy and commitment across various players in South Africa to get our country on the path of inclusive economic growth and shared prosperity.”
The research also suggests that scaling digital platforms could create up to 340,000 jobs by 2035 in a country that continues to grapple with one of the highest unemployment rates in the world. As South Africa navigates this critical period, the shift towards digitalization presents a unique opportunity to unlock significant economic potential and drive sustainable growth.
