How Marketplaces Unlock SME Potential In SA

SME Potential In SA

21 AUGUST is World Entrepreneurs’ Day, a day when people who start their own businesses are celebrated globally. One of the biggest make-or-break factors for small to medium sized businesses is creating and maintaining a strong online presence. It’s for this reason that digital marketplaces have become the go-to platform for savvy entrepreneurs looking to fast-track growth while cementing their digital footprint.


A digital marketplace – think eBay, Amazon, Etsy – is essentially a digital market, where many businesses sell their goods on one platform. The marketplace ‘host’ is responsible for payments, security and delivery.

Setting up secure payment methods, establishing logistics and distribution, building a brand, driving traffic to site and various other operational requirements become a breeze as established etailers already possess the necessary operational infrastructure.

For birdseed producer Valemount, listing on the marketplace has rapidly scaled up its well-established business through exposure to a new audience. Owner Amy Westerman, says if businesses don’t have an online presence, they will struggle to succeed. “Our marketplace listing has allowed us to extend our reach to customers in far outlying areas.  These customers are now given the opportunity to buy the “fancy products” (which in the past were only available in the main centres).”

In the South African context, economists believe marketplaces will be instrumental in unlocking SME potential. Elias Masilela, executive chairman of DNA Economics, says the National Development Plan identifies SME as a key ingredient for growth. “One of the biggest hurdles faced by SMEs is access to markets – and staying in the market. Big business also fiercely guards its dominance in the market.”

Marketplaces can assist by providing a vehicle that drops the barriers and makes distribution more affordable to this sector of the economy. In doing so, they can become more competitive players to the benefit of the consumer and the economy. Distribution is central to the success of business.

Rugs Original, a national retailer with 18 stores, has chosen not to invest in its own ecommerce capability but rather to sell via the marketplace.  “In just over two years we’re selling an average of R250 000 online. When using Takealot newsletters this is anywhere between R500 000 and R750 000,” says Rugs Original Managing Director Trevor Blumberg.

Frederik Zietsman, Head of Marketplace at, says, “Digital marketplaces are contributing trillions to the global economy. The ability to connect buyers and sellers is catalysing unprecedented entrepreneurial growth and, in many ways, is just getting started. is fully committed to growing this part of the business as it not only provides sharp growth in terms of product offering range, but it also allows for relatively easy scaling and empowering of local business owners.”

Here are Zietsman’s top reasons for SMEs to consider marketplace selling:

  1.  Online spending is increasing

PayPal and Ipsos’ cross-border commerce report predicts SA’s online spend to reach R53 billion this year. There are big opportunities for SMEs that capitalise on online marketplaces but also a growing gap for those that don’t benefit from these.

  1.  Credibility and trust

For some customers, it feels safer to do online transactions with a big ecommerce name like than a small, relatively unknown SME.

  1.  A bigger reach with fewer resources

Established ecommerce sites often have large and loyal customer-bases for small businesses and entrepreneurs to tap into.

  1.  A seamless end-to-end customer journey

Operating via these platforms allows SMEs and entrepreneurs to offer new and existing customers an elevated level of service.

  1.  Delivery logistics are taken care of

With the marketplace delivering the SME’s products to the customer’s door. How fast a customer receives his or her goods is directly correlated to the prospect of repeat business.

  1.  Marketing best practice

Not only will the marketplace help package products beautifully, they’ll also have best practise marketing, SEO and analytics, all of which help a business grow.

  1.  Rich data

A marketplace system is ideally positioned to provide truly rich data. From buying habits to emerging trends, a digital platform allows for analysing and understanding customer demands.

  1.  No need to invest in bricks and mortar

Robert Friese of Eurocare Wellness says that an online marketplace gave them instant access to the market without the need to invest capital in retail outlets. “Without listing on there would be no business – we got instant access to the market. We now grow by an average of 10% month-to-month.”

  1. Training opportunities

Big marketplaces can also offer training and continuous learning opportunities to sellers

along with specialised skills to bridge capability gaps.

  1. Growth… and lots of it.

An established marketplace allows for sellers to quickly – and affordably – reach a much

broader audience. No longer confined to a physical location, business owners are now able to promote their products easily and more efficiently.

Are you a SME business owner hoping to set your company apart from the competition? Maybe it’s time you investigated a local marketplace to suit your needs. Whether it’s for selling birdseed or baths, comics to cameras, there’s sure to be a buyer for your products online.