Digital adoption is no longer the biggest hurdle for many South African small businesses. Instead, the challenge is turning an established online presence into a sustainable and scalable business.
New research from Amazon South Africa suggests that the country’s digitally active small, medium and micro enterprises (SMMEs) have made significant progress in adopting e-commerce, with 86% of surveyed businesses reporting that they generate sales online. However, despite this digital readiness, fewer than one in three active online sellers use a major online marketplace.
The findings, contained in the Amazon Small Business Digital Adoption Report 2026, conducted by independent research organisation World Wide Worx, point to a changing landscape for South African SMMEs. Based on a survey of 1 400 businesses, the research suggests that the barriers to e-commerce growth are shifting away from basic internet access and payment infrastructure towards more complex operational challenges, including logistics, delivery, returns management and recurring digital costs.
For small businesses, this presents an important question: having an online presence is one thing, but having the infrastructure, resources and support to fulfil orders efficiently and grow beyond an existing customer base is another.
The report also highlights differences in how businesses approach digital selling, with women-owned businesses showing stronger adoption of structured online sales channels, while artificial intelligence (AI) is gaining traction primarily in marketing.
Together, these findings offer insight into where South African SMMEs stand in their digital transformation journey, what is preventing them from scaling and where the next opportunities for e-commerce growth may lie.
Adoption Among South African SMMEs: How Digital Are Small Businesses?
Digital adoption has become an increasingly important part of business operations, with SMEs using online channels to connect with customers, market their products and generate sales. Amazon’s latest research suggests that among urban, digitally active businesses, internet usage and online selling are already well established. However, understanding the extent of adoption requires looking beyond whether businesses are online to how they are using digital channels to support their operations and growth.
The report highlights that among surveyed SMEs, 99,6% use the Internet for business purposes, while 86% generate sales online, and only 32% of active online sellers use a major marketplace. This shows that online selling is no longer unfamiliar to a significant proportion of established small businesses.
For SMEs, the conversation is no longer about having an online presence but rather about which digital channels to use, how to manage the costs of growing order volumes, and how to reach customers beyond their immediate networks.
Robert Koen, Managing Director of Amazon Sub-Saharan Africa, says the research demonstrates that small businesses are digitally capable and ambitious but face operational constraints that make growth more difficult.
Why Many SMEs Aren’t Using Online Marketplaces
Despite the high number of online sellers, Amazon’s research highlights a significant gap in online marketplace participation. Among active online sellers, 96% sell through their own websites, 67% use social media and 51% sell through WhatsApp. By comparison, only 32% list their products on a major online marketplace.
These figures suggest that many SMEs are comfortable managing their own online sales channels and have not fully explored the option of third-party marketplaces. Additionally, the research shows that businesses that have invested time and resources in building their own websites or social media communities may view joining a marketplace as an unnecessary additional expense or a complicated process.
However, online marketplaces can offer access to a larger number of established customers and provide additional visibility and infrastructure that would be difficult for smaller businesses to develop independently.
The report identifies two notable barriers to marketplace participation.
Firstly, 21% of respondents believe their businesses are too small to qualify for marketplace selling. Secondly, 39% cite application requirements or fees as reasons for not participating.
This suggests that the marketplace opportunity is not necessarily limited by a lack of interest in e-commerce but rather by perceptions about accessibility, affordability and the practical requirements of joining these platforms.
What Marketplace Participation Could Mean for SMME Growth
For small businesses, selling through an online marketplace can complement existing sales channels rather than replace them, creating a second revenue stream. Independent business websites, social media accounts and a WhatsApp channel can remain important parts of a sales strategy. A marketplace adds another potential route to customers, particularly those who may not already know the business or follow its social media platforms.
However, marketplace participation also requires businesses to understand listing fees, commissions, fulfilment requirements, customer expectations and the impact of additional sales channels on their margins.
Arthur Goldstuck, CEO of World Wide Worx, argues that small businesses have already demonstrated their ability to sell online. The next step is providing clearer pathways, simpler onboarding and practical support to help them expand.
Logistics and Delivery Have Become the Biggest E-commerce Challenges
Perhaps the most significant finding in the report is the shift in the challenges facing online sellers. For businesses that have already established digital sales channels, the difficult part increasingly begins after a customer places an order.
According to the research, 62% of active online sellers identify logistics and delivery as their biggest challenge. A further 46% cite returns management as a major pressure point.
By comparison, payment systems are cited by just 12% of online sellers, while connectivity is a concern for only 5%. This suggests that the operational side of e-commerce is still a pressing issue for digitally active businesses, surpassing connectivity and online payments.
For SMEs, fulfilling an online order involves several moving parts. Products must be stored, packaged and dispatched, while businesses must manage delivery timelines, customer communication, failed deliveries and returns.
The Hidden Operational Costs of Selling Online
Logistics challenges are not limited to just the physical movement of products. They also have a direct impact on profits, customer satisfaction, and the time business owners can dedicate to other parts of the enterprise.
A small business managing its own deliveries may need to negotiate with courier companies, track shipments, resolve delivery issues and maintain sufficient stock to meet customer demand. And, as order volumes increase, these responsibilities can become increasingly complicated and expensive.
Additionally, the cost of reverse logistics – the logistics needed when a customer returns a product – provides SMEs with additional costs and operational pressure. Businesses must account for returned products, inspect stock, process refunds or exchanges and communicate with customers throughout the process. For smaller enterprises, these tasks can divert resources away from marketing, product development and business expansion.
How Third-Party Fulfilment Help Small Businesses
One potential solution to help small businesses with logistics is the use of third-party fulfilment services. Amazon highlights its Fulfilment by Amazon (FBA) offering as an example of how marketplace infrastructure can reduce the operational burden on independent sellers.
Through FBA, sellers can store their products in Amazon’s fulfilment network, with Amazon managing storage, packing and shipping to customers. The service is designed to help businesses access delivery capabilities without having to manage every part of the fulfilment process themselves.
The advantage of initiatives like FBA is that SMEs can outsource fulfilment responsibilities, freeing up time and resources for other things such as product development, customer acquisition and strategic planning.
However, businesses must still assess the costs of fulfilment services against their product margins, sales volumes and operational requirements before deciding whether outsourcing makes commercial sense.
What the Findings Mean for the Future of E-commerce in South Africa
The report shows that the e-commerce sector is maturing among digitally active SMEs. These businesses have demonstrated their willingness and ability to establish online sales channels. However, their next phase of growth will depend on whether they can overcome the operational and financial pressures associated with managing digital commerce.
For SMEs, this means the next stage should focus on building stronger systems, improving fulfilment capabilities and making informed decisions on the platforms they leverage.
Additionally, the findings highlight a greater need for e-commerce marketplaces to reconsider how they engage with small businesses. Simply providing a platform on which businesses can list their products may not be enough.
SMEs also need support with onboarding, product listings, fulfilment, customer service, returns management and understanding the costs associated with online selling. Marketplaces that can address these requirements may be better positioned to attract small businesses that are already selling online but need additional infrastructure to expand.
“These findings reinforce what we hear from sellers every day; the hard part is not getting online, it’s managing what happens after a customer clicks ‘buy’, said Koen.
“This is exactly where we at Amazon can make a difference. Our logistics network, fulfilment capabilities and seller support tools are there to take the burden off small businesses so they can focus on growth.”
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