Only one in 10 township businesses sells online

The Competition Commission has for the first time put hard numbers on how far South Africa’s township and rural businesses are shut out of online retail, and it points to informality, missing capabilities and weak infrastructure as the main reasons.

The findings appear in the commission’s inaugural Rural and Township Economy Report, launched on Thursday on the first day of the 20th Annual Competition Law, Economics and Policy Conference in Melrose Arch, Johannesburg. It draws on two national surveys – a business survey and a consumer survey – conducted for the commission by research firm RedFlank.

Just 11% of township businesses and 9% of those in rural towns sell through online marketplaces. Only 11% of township firms and 6% of rural ones run their own e-commerce sites. By contrast, roughly half – 51% in townships and 48% in rural towns – still depend on walk-in trade at their own physical stores.

The gap is as stark on the demand side. Online customers account for 7% of township businesses’ reach and 5% in rural towns, with the overwhelming majority reporting that local residents are their main, and often only, market.

When the commission asked business owners why they were not selling online, registration came top:

The commission says it regards these answers as evidence that the barriers to online selling are “closely linked to informality, capabilities and infrastructure”. Notably, the second-largest reported constraint in townships is not exclusion at all but a judgement that online is the wrong channel – a finding that sits awkwardly alongside the report’s wider argument about latent demand.

The report ties the structural constraints back to the commission’s Online Intermediation Platforms Market Inquiry, the investigation that in 2023 told Takealot to separate its retail and marketplace arms. It argues that platform rules, search rankings, commissions and fees ultimately decide whether small sellers can compete online at all, warning that online intermediation can open up access “only if platform conditions enable fair participation by smaller sellers”. That argument is drawn from the earlier inquiry rather than from the new survey data.

Crucially for the sector, the commission says it will not stop at research.