Naspers, Africa’s largest company by market value, is forecasting that rapidly growing e-commerce and digital platforms will contribute R91.4 billion ($5.2 billion) to South Africa’s economy by 2035.
Research conducted by Naspers and the Mapungubwe Institute for Strategic Reflection (MISTRA) indicates that this increase could potentially make up 1.38% of the country’s GDP.
Naspers’ expansion plan
Naspers, which owns South Africa’s leading online retailer Takealot, has been expanding its services looking to offer faster delivery times, including offering one-hour delivery for a range of products. This move is designed to help the company compete with Amazon, the world’s largest online retailer, which entered the South African market in May.
To actualise this expansion, Naspers appointed Fabricio Bloisi as CEO in May. Bloisi is known for his success with the food-delivery platform iFood. Under the new CEO’s leadership, Naspers aims to turn its e-commerce division into a major profit generator.
In fact, the division’s strategy seems to already be working as it reported a full-year trading profit of $38 million for the first time in the year ending March 31.
According to MISTRA’s Senior Researcher Machete Rakabe, the R91.4 billion($5.2 billion) impact could be achieved even earlier if South Africa’s economic growth rate increases to around 3%. However, Rakabe stressed the importance of improving infrastructure, such as expanding access to data centres and digital identity documents, to ensure these benefits reach everyone.
South Africa’s economic growth has been slow, averaging less than 1% annually over the past decade. This has been attributed to energy shortages and infrastructure challenges. This sluggish growth has prevented the country from fully capitalizing on its young population and large upper-middle-income market. Currently, digital platforms contribute about R5 billion($281 million) to the economy.
Renewed focus on South Africa’s economic growth
South Africa’s new government of national unity led by President Cyril Ramaphosa, has brought a renewed commitment to economic reform and investment. This could be a turning point for South Africa’s economy.
Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa, noted that there is now a greater sense of determination among various stakeholders to put the country on a path to inclusive growth and shared prosperity. She pointed out that while the shift to digitalization in South Africa is still in its early stages, it aligns with global trends and offers a unique opportunity to unlock significant economic potential.
Naspers’ research also suggests that expanding digital platforms could create up to 340,000 jobs by 2035. A significant shift in a country that currently faces one of the highest unemployment rates in the world.
