Beyond connectivity: Why tech access key for SA’s informal economy

South Africa's digital divide has shifted from merely about internet access to whether small businesses can access technology to operate more efficiently once connected. Smartphone use is widespread, and many businesses in townships and informal areas already utilize digital channels for orders, inquiries, and payments. However, these digital activities often coexist with handwritten records, manual invoicing, and non-integrated systems.

The Competition Commission's report reveals only 11% of township businesses sell through online marketplaces, while the same percentage operate their own e-commerce websites. Online customers represent just 7% of their reach, with roughly half still relying on walk-in customers. For businesses not selling online, 24% cite registration or eligibility requirements, 15% point to limited knowledge, and another 15% attribute the issue to inadequate infrastructure.

These figures indicate that basic connectivity is no longer the sole obstacle. While 85.6% of households have internet access, 4G networks cover 99.5% of the population, and over 83 million South Africans own smartphones. The next step in digital inclusion must consider whether smaller businesses can afford, understand, and effectively use the tools required for digitally enabled operations.

For many micro-enterprises, the initial stage of digitisation has happened organically, with smartphones serving as points of sale, customer service, marketing platforms, and communication hubs. While this creates some digital functionality, it also introduces new administrative challenges. A fragmented approach—relying on separate tools for orders, customer details, stock management, invoicing, and payment tracking—can hinder overall efficiency.

Therefore, the conversation around technology for small businesses should shift from persuading more entrepreneurs to go digital to making useful business technology more accessible. Software designed for large enterprises often poses significant barriers for micro-enterprises with limited budgets, no dedicated IT support, and the need to handle multiple roles.

Technology must cater to these realities, being priced affordably, mobile-friendly, and easy to use without specialized assistance. Cloud and low-code technologies can alleviate much of the initial burden, enabling non-technical owners to transform offline processes into digital applications. For instance, Zoho Creator allows businesses to convert simple tools like stock books or delivery logs into digital applications.

Gradual integration is key, with smaller businesses initially needing basic digital invoicing and cash-flow tracking before eventually adding inventory management, customer records, or an online sales channel. Zoho's Zoho One suite provides such functionalities, allowing businesses to start with essential tools and expand as needed.

The goal is not to compel every micro-enterprise to adopt every application but to ensure technology adapts to the business, facilitating incremental growth. Many small businesses are already digitally fragmented, and the opportunity lies in helping them connect these fragments, creating a unified operational picture. Stats SA reports that the informal sector accounts for 21.4% of total employment in the fourth quarter of 2025, highlighting the sector's critical role in South Africa's labour market.

With nearly nine in ten township businesses yet to sell through online marketplaces, the focus should be on providing practical, affordable, and accessible tools to help these enterprises run stronger businesses, manage growth, and fully participate in the digital economy. Connectivity has opened the door, but inclusive growth will depend on providing practical tools that help small and informal businesses navigate this transition.