Picture: 123RF/YAZAYO
Picture: 123RF/YAZAYO

As technology firms compete to create an all-in-one platform for commerce in SA, those most likely to benefit are the country’s neglected small businesses.

The potential value of a thriving small-enterprise sector for SA’s sinking economy has often been stated. But the experience of such firms has generally been wound up in red tape. They are faced with poor administration by the government, banks and others, and have to deal with many regulatory requirements.

Vodacom, SA’s largest mobile operator, recently launched a new partnership with Chinese mobile payments giant Alipay to create a super app that will aggregate merchants and service providers so that users can do all their business online and "never have to leave the app".

Perhaps the most famous example of a super app is Tencent’s WeChat. It lets its users order food, hail rides, play games and make payments for a growing list of services. By the end of the first quarter of 2020 WeChat had more than 1.2-billion users, most of them in China.

That success has convinced many companies — including Nedbank, which launched its own super app, Avo, in June — that new growth areas such as mobile payments and integration with multiple service providers is the future.

Tencent, which is one-third owned by Prosus, made 82.3bn yuan (R196.4bn) from its social media business in 2019.

At the least, projects such as these could offer relief for business owners who have been hard hit by weeks of lockdown that left many unable to trade.

New data from Facebook shows that 45% of small businesses trading on that platform in SA have reduced their employee headcount as a result of the Covid-19 pandemic, while 45% expect cash flow to be a challenge in the next few months.

The Silicon Valley company has been building a small business platform for years. In fact, small businesses have come to rely on platforms such as Facebook and Instagram for a great proportion of their marketing and exposure, as well as sales.

Already 160-million small enterprises use Facebook apps, including WhatsApp and Messenger, to do business worldwide.

Facebook recently launched its Shops platform in SA, which allows a business to set up an online store. It offers features like payment integration and checkout. This is in addition to its Marketplace service, on which people list items for sale, much like on OLX or Gumtree.

Using similar language to Vodacom’s, Facebook says: "Shops help people explore [a business’s] collections and products without leaving Facebook or Instagram."

Facebook Africa’s regional director, Nunu Ntshingila, shared the results of the "Global State of Small Business Report" with the FM. She is concerned because "we saw a 40%-50% closure rate" of small businesses during the lockdown, mainly due to government regulations that stopped some industries from operating.

The study, which spans five months, has the benefit of data from before, as well as during, the lockdown.

"What we see in SA mirrors what we saw around the world," Ntshingila says. The circumstances may differ, but small businesses are facing a tough time wherever they are. In Ghana, for example, business closures have been spurred more by a loss of customers, and therefore revenues. That country’s lockdown is far more lenient than SA’s.

To drain even more colour from an already bleak local picture, Guy Hosking, CFO at Retail Capital, a small-business funder, says the R200bn loan guarantee scheme set up by government to help business has proved difficult and onerous for the intended recipients to get access to. "Because of that, uptake has been minimal," he says.

By some estimates, less than 5% of the funds had gone to small businesses as late as the start of July, he says.

Nevertheless, even in an environment of economic devastation, some companies may be positioning themselves for a future in which business moves online.

The Facebook report reveals that 44% of small businesses that use Facebook feel optimistic about the future of their business. And 59% of enterprises report that 25% or more of their sales were made digitally in the past month.

Facebook’s plethora of services for businesses may hint at what players like Vodacom and eve n fixed-line operator Telkom are planning for their SA business clients. Telkom recently began rebranding and repurposing the almost 70-year-old Yellow Pages into an online marketplace as part of an effort to capitalise on the increase of e-commerce and grow new revenue streams.

Formed from the Yellow Pages brand, the new Yep! online marketplace will allow businesses that have normally listed their services, offerings and contact details in it to sell their wares directly to the public, allowing for buying, selling and bidding between businesses and to consumers. Yellow Pages has about 500,000 local businesses registered and about 1-million monthly visitors to its site, which is a good starting point for Yep!, says Telkom Business CEO Lunga Siyo.

For mobile operators, the big prize may be finally finding a way to capitalise on the mobile payments revolution, something that has seemed out of reach in SA.

Vodacom CEO Shameel Joosub and his team shut down their M-Pesa mobile money service in SA in 2016, citing a lack of commercial viability, as three-quarters of SA’s population had bank accounts.

Now Vodacom seems to be taking another stab at mobile money in SA. As revenues from voice decline and data margins are squeezed, the hunt for new streams is on. Alipay is considered to be one of the world’s largest super apps, with about 1.3-billion users, making it one of the largest payment providers. It surpassed PayPal in 2013.

MTN relaunched its mobile payments service, MoMo, locally at the start of the year and recently reported that it had 1-million users.

While the global race for e-commerce marketplace and mobile dominance hots up, local businessman Edward Bouwer is betting on a return to barter trade. He plans to launch SwopAnything.com in SA, a platform made to let "swoppers" exchange items without the need for money.

Bouwer says the unique feature of the app is that users can barter across categories, such as services, experiences, products, collectables, skills and anything else.

"It is the only platform in the world on which money is optional," he says, adding that small businesses could take advantage of it to rather trade skills, given how hard money is to come by for many potential clients.

Bouwer’s OneMinute Technologies recently received an investment of $10m to build its technology.

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