Naspers, Africa’s largest company by market capitalization, anticipates that e-commerce and digital platforms will contribute R91.4 billion ($5.2 billion) to the South African economy by 2035. This growth is projected to account for 1.38% of the country’s gross domestic product over the next decade, according to a research report by Naspers and the Mapungubwe Institute for Strategic Reflection (Mistra).
Naspers, which owns Takealot, South Africa’s leading online retailer, has been enhancing its service offerings, including the introduction of one-hour delivery for a range of products from phone chargers to toys. This move is intended to boost its competitive edge against Amazon, which entered the South African market in May.
Under the leadership of new CEO Fabricio Bloisi, who previously expanded the food delivery service iFood, Naspers aims to transform its e-commerce operations into a major revenue driver. For the fiscal year ending March 31, the division reported its first full-year trading profit of $38 million, marking a significant milestone following years of investment.
Machete Rakabe, Senior Researcher at Mistra, highlighted that achieving the R90 billion-plus economic injection could happen sooner if South Africa increases its current growth rates to approximately 3%. “We also need to focus on infrastructure development to ensure broader reach, along with investments in data centers and digital identity documents,” Rakabe noted. The country’s GDP has grown by less than 1% annually over the past decade due to issues such as energy shortages and deteriorating infrastructure.
The slow economic growth has limited South Africa’s ability to leverage its youthful population and its status as one of the largest upper-middle-income markets in the region. Currently, digital platforms contribute about R5 billion to the economy, according to Rakabe.
A potential shift in economic dynamics could come with the government’s commitment to accelerating reforms and investments. The new government of national unity, formed after the African National Congress lost its parliamentary majority in the May 29 elections, is expected to drive this change.
“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,” said Naspers South Africa CEO Phuthi Mahanyele-Dabengwa. She added, “Although still in its early stages, the transition to digital in South Africa reflects global trends and presents a unique opportunity to unlock substantial economic potential for our nation.”
The expansion of digital platforms is projected to create up to 340,000 jobs by 2035 in a country with one of the highest unemployment rates globally. The government is already collaborating with Takealot on initiatives aimed at boosting South Africa’s township economy, particularly in areas outside major metropolitan centers. Trade Minister Parks Tau mentioned that the government is working with Takealot to enhance its program, which includes developing delivery drivers and increasing the availability of locally made products from small businesses and township industries on its platform.
Naspers shares have surged more than 16% this year, bringing the company’s market value to R662 billion as of 12:55 p.m. local time on Tuesday.