The Competition Commission has released its first Rural and Township Economy Report, and the headline is stark: just 11% of township businesses and 9% of rural firms sell through online marketplaces. For owners of spaza shops, small manufacturers and service providers, the numbers spell a missed opportunity to reach customers beyond the neighbourhood and to tap into the formal economy.
The report, unveiled at the 20th Annual Competition Law, Economics and Policy Conference in Johannesburg, draws on two national surveys carried out for the commission by research firm RedFlank. It shows that only 11% of township firms and 6% of rural ones run their own e-commerce sites, while roughly half still rely on walk-in trade at physical stores, 51% in townships and 48% in rural towns.
When asked why they do not sell online, business owners cited registration hurdles as the top barrier. The commission interprets this as evidence that informality, missing capabilities and weak infrastructure are closely linked to the low uptake. The second-largest reason in townships was a belief that online is the wrong channel, a view that sits oddly alongside the report’s claim that there is latent demand for digital sales.
Platform rules also play a part. The commission’s earlier Online Intermediation Platforms Market Inquiry forced Takealot to separate its retail and marketplace arms, and the new report argues that search rankings, commissions and fees set by platforms can decide whether small sellers can compete online at all. Those findings are drawn from the earlier inquiry rather than the fresh survey data.
What the numbers mean for small sellers
Private players are already testing solutions. Shop2Shop is pushing cash-to-digital tools for spaza traders, while Shoprite has launched a B2B e-commerce service aimed at small retailers. Both initiatives suggest that larger firms see value in bringing township and rural merchants onto digital channels, but the report warns that without fair platform conditions the benefits may not reach the smallest sellers.
Commissioner Doris Tshepe framed the stakes in terms of participation in the mainstream economy. She said inequalities will only narrow if township and rural residents can expand beyond the Kasi economy and take part in the formal malls and online purchases of middle-class South Africa. In other words, the ability to sell online is not just a growth lever for individual firms; it is a gateway to broader economic inclusion.
For an SME owner, the findings highlight three practical considerations. First, addressing registration and compliance gaps could open the door to marketplace participation. Second, building digital skills, from basic website management to using mobile payment solutions, may shift the perception that online is the wrong channel. Third, monitoring platform terms and seeking collective bargaining through trade bodies could help mitigate costly commissions and unfavourable search placement.
The commission does not propose a single intervention. It recommends a mix of competition advocacy, stakeholder coordination, targeted research and, where warranted, screening of anti-competitive practices. While the report is a research document rather than a formal market inquiry, its recommendations could shape future policy or regulatory action.
One limitation of the study is that the underlying surveys are not publicly released and the sample size is not disclosed. Without that information, the exact representativeness of the 11% figure cannot be independently verified.
Nevertheless, the report puts a spotlight on a gap that many small business owners already feel. As digital platforms continue to dominate retail, township and rural firms that manage to overcome registration, skills and infrastructure hurdles could capture a slice of the online market that is currently untapped.
Beyond registration and skills, the practical cost of getting a small township or rural business selling online is itself a real barrier the report’s headline figure does not fully capture: a functioning e-commerce operation needs a card-payment gateway, a way to manage stock and orders, and a reliable delivery or collection option, each of which carries its own monthly cost or commission that a spaza shop or small manufacturer running on thin margins has to absorb before seeing a single online sale.
