Naspers expects e-commerce and other digital platforms to inject R91.4-billion into the South African economy by 2035.
That would see the sector contribute 1.38% to GDP in just over a decade, research done by Naspers and the Mapungubwe Institute for Strategic Reflection shows.
Naspers owns Takealot, South Africa’s top online retailer, and has been expanding its services to include one-hour delivery for items ranging from phone chargers to toys. That will help it better compete with Amazon, which entered the local marketplace in May.
Naspers, the controlling shareholder of internet investing giant Prosus, aims to turn its e-commerce business into a cash cow under its new CEO, Fabricio Bloisi, who built out food delivery business iFood. The division reported its first full-year trading profit of US$38-million for the year ended 31 March as it managed to scale its business after years of investment.
The R90-billion-plus economic injection can be achieved “even earlier, if we are able to increase the country’s current growth rates to about 3%”, Mistra’s senior researcher, Machete Rakabe, said in an interview. “We need to also focus on infrastructure to make sure we can reach everyone, as well as data centres and digital identity documents.”
GDP has expanded by an average of less than 1% over the past decade because of energy shortages and collapsing infrastructure.
Lacklustre economy
The economy’s lacklustre performance has meant that South Africa hasn’t fully benefitted from its youthful population, together with one of the largest upper-middle-income markets in the region. Currently, digital platforms contribute about R5-billion to the economy, said Rakabe.
A commitment to accelerate reforms and investment by the government of national unity, which was formed after the ANC lost its parliamentary majority in the 29 May election, could change that.
“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. “Though still in its early stages, the shift to digital in South Africa mirrors global trends and offers a rare chance to unlock significant economic potential for our nation.”
Read: Fabricio Bloisi outlines his plan for Naspers and Prosus
Scaling the digital platforms could create as many as 340 000 jobs by 2035 in a country with one of the highest jobless rates in the world, according to the research.
Cape-town based Naspers shares have risen almost 16% this year, valuing the company at R659-billion. — (c) 2024 Bloomberg LP
