TH O UG H T L E A D E R S HI P
The digital economy delivers jobs and accelerates SME development By Mamongae Mahlare, Takealot Group CEO
ow do we create more employment while growing an inclusive and transformed South African economy? This is a perpetual challenge faced by the public and private sectors. Part of the answer lies with e-commerce and digital markets.
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In the standard retail model, a business opens more stores when it is successful. This requires great capital investment. Although this works for well-funded players, SMEs without such access face various market barriers. For these enterprises having a product or service is not enough. Statistics suggest that only one in ten South African start-ups make it past year three. How can we improve those odds and generate jobs to jumpstart the economy? Mamongae Mahlare, Takealot Group CEO
The digital economy: the great equaliser
The market penetration for South Africa’s digital economy is currently around 4%. This reflects a massive growth potential when you consider similar emerging markets such as Brazil, which are at about 8 to 14 percent.
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Business Day – FOCUS 4.0
E-commerce unlocks small businesses’ power to contribute to a vibrant economy by leveraging technology and innovation. Takealot is a case in point. Our platform and others like it now offer the infrastructure to help SMEs compete on an equal footing with large enterprises by reducing the costs associated with competing in this market. Small businesses register and list their products on the platform, supply the goods, and are in business. Registration gives them instant access to a receptive customer base, storage, order fulfilment and delivery. Our model removes the complexity of running a business, increasing the odds of success and allowing SMEs to enter the formal economy. Thousands of new entrepreneurs have entered the market, encouraged by the success of their
peers on such platforms and the opportunity to compete head-to-head with global and local brands. The Takealot Group’s success evidences the power of this business model. The company started 11 years ago with 20 employees. Today the ecosystem supports more than 33 000 jobs. Small and medium-sized businesses trading on the platform have grown from 120 to 8000, and there are more than 10 000 restaurant partners on our on-demand Mr D platform. The power of the model is that we are only successful if the SMEs we partner with are too. This represents a symbiotic relationship that unlocks entrepreneurial talent and enables a pathway to equitable economic participation that helps transform our economy and distribute wealth among a wider group of people.
The future of South Africa’s Digital Economy The market penetration for South Africa’s digital economy is currently around 4%. This reflects a massive growth potential when you consider similar emerging markets such as Brazil, which are at about 8 to 14 percent. To maximise the future growth of this sector, we need to create the right conditions for different business models to evolve and become profitable. This is a delicate balancing act between regulating to encourage investment and development while pre-empting potential competitive concerns. It is equally important to increase access to affordable data, electricity and logistics infrastructure, helping to reduce the cost of doing business. If we fail to get this right, we will miss a golden opportunity to transform and accelerate our economy.
