More SMME e-commerce participation required

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 29 Sept 2023
Small and new e-commerce platforms struggle for visibility and customers.
Small and new e-commerce platforms struggle for visibility and customers.

Cabinet wants to see meaningful participation of South Africans and small, medium and micro enterprises (SMMEs) in the growing online business space.

This, after the Competition Commission’s (CompCom’s) Online Intermediation Platforms Market Inquiry found dominant players, such as Google, distort platform competition, as small and new platforms struggle for visibility and customers.

In a statement, Cabinet notes it has received the CompCom’s report, commending the competition watchdog’s work in addressing monopoly concerns in digital intermediation platforms, including e-commerce, online travel agencies, food delivery, app stores, classifieds providers and search engines.

As a result, Cabinet says it has directed ministers of relevant government departments to further engage with the recommendations for improvement, consider the policy implications and undertake necessary policy reforms that will facilitate SMME participation in the online retail space.

Data shows SMMEs absorb between 50% to 60% of the country’s workforce, contributing 39% to the national gross domestic product. However, small businesses continue to take strain and face challenges preventing them from fulfilling their potential.

Government has, in the past, been vocal about the need to address issues confronting small businesses and encourage an entrepreneurial ecosystem.

The CompCom’s report was the culmination of almost two years of investigations into local and international business-to-consumer online platform markets, and identifies features that adversely impact competition in these markets.

The investigation was initiated in terms of section 43B(1)(a) of the Competition Act 89 of 1998 (as amended), to identify market features that have adverse effects on healthy competition, and display areas of manipulation, exploitation or distortions within SA’s online retail sector.