Anticipated trends for 2019 among South African small and medium enterprises

22 January 2019

Small and Medium Enterprises (SMEs) are a central part of South Africa’s economy, but according to Chief Executive at Diversiti Management Consulting, Richard Andrews, the segment is expected to struggle over the next year in light of growth in popularity of incumbents and disruption from AI. 

According to Andrews, South Africa is a market where incumbent large firms are looking to invest in expanding their capabilities, which does not bode well for SMEs trying to carve out a market for themselves in the country. The situation is compounded by the desire of the new President to draw large amounts of foreign investment in the near future.

The initiatives hope to make business easier for foreign firms in South Africa by offering a number of benefits. The anticipated flood of foreign investment is likely to offer fierce competition to existing SME’s in South Africa. The segment is looking to devise strategies to deal with the scenario, one of which is the use of social media to offer tailored solutions.

“Companies are starting to make greater investment in delivering customer service through automated technology and chat apps,” said Andrews. “In doing this, customers are given a more customised experience as they drive the interaction and ask the questions that bring them closer to what they want and need,” he added.

Anticipated trends for 2019 among South African small and medium enterprises

Another strategy that Richards expects SMEs to adopt is that of “sharing economy solutions,” wherein firms will shift away from the traditional business model of selling products to the more modern model of rental or subscription offerings. The drawback of this strategy is that it might not be relevant to all firms. 

One set of tools that most SMEs have the chance to leverage is those within the Industry 4.0 domain. SMEs in South Africa have traditionally been reluctant to embrace new technologies such as artificial intelligence, cloud, or blockchain, which now constitute the basis for many incumbent larger businesses.

Nevertheless, an increasing number of firms are now beginning to embrace these technologies, particularly as innovation increasingly becomes a mantra of sorts for the business environment in South Africa. Blockchain and Internet of Things are becoming increasingly popular amongst SMEs.

A last area where Andrews predicts there will be a lot of emphasis is that of employee wellness. “Employees want a better work-life balance, and SMEs will have to cater to these demands to retain and hire the best talent for their workforce,” he explains, particularly as skill development is an increasingly pertinent issue in South Africa.

More news on


Smartphones are the device of choice for ecommerce in South Africa

08 April 2019

As the online retail market continues to expand in South Africa, customers are reporting that smartphones are their devices of choice when shopping online, more so that PCs and tablets. These numbers are detailed in analysis of the global consumer market conducted by global professional services firm PwC.

South Africa’s consumer retail sector has been among those that have remained the most stable throughout a relatively turbulent period for the country’s economy in recent years. The sector has grown at a steady rate of 5%, driven by growth in the operations of some of its largest retail companies.

Nevertheless, much like the rest of the economy, the retail sector is being heavily affected by the advent of digital tools, leading to a thriving ecommerce segment and significant transformations in the traditional retail segment. The latter includes the ‘digital retail’ experience, which offers customers data-driven insights in real time.

Outside of the retail sector, South Africans appear to have moved on to the digital sphere to conduct a range of other economic activity, including monetary transactions. According to Anton Hugo, who is the Leader of the Retail & Consumer Segment for PwC Africa, South Africans are rapidly becoming tech savvy.Smartphones are the device of choice for ecommerce in South Africa

Hugo describes that the devices used to conduct online transactions have undergone a transformation. Where consumers traditionally used a laptop or a PC for online purchases, 18% of the respondents to PwC’s survey in South Africa use smartphones for online shopping, which only 14% use a PC and 11% use a tablet.

More than 63% of the respondents, meanwhile, revealed that they had used their smartphone to clear bills and invoices over the last year, while 67% had used the devices to transfer money. South African consumers lead the global average in the usage of smartphones for the above functions.

“Not only are consumers the strongest link in the global economic chain, but PwC's Global Consumer Insights Survey shows the technological tools available to them have put them in a position to demand a tailored, seamless and multichannel shopping and social-media-powered experience. Retailers can achieve this by using a blend of both physical and digital approaches. The result for companies will be a greater return on experience with the customer and gaining a competitive advantage,” said Hugo.

Partner at PwC Rashaad Fortune commented on South Africa’s digital maturity, saying “In SA, having access to a computer with Internet access has been a challenge for many people, but with smartphones becoming cheaper and readily available, people have bypassed PCs and gone straight to mobile.”