SA online sellers face
new growth barriers

South Africa’s small businesses have largely overcome the technological barriers to selling online, only to encounter a new obstacle: the growing cost and complexity of delivering what they sell.

A major new study of 1,400 small, medium and micro enterprises (SMMEs) has found that 62% of active online sellers regard logistics and delivery as their biggest operational challenge, followed by returns management at 46%. Connectivity, once one of the biggest obstacles to digital adoption, is now a concern for only 5%.

The findings come from the Amazon Small Business Digital Adoption Report 2026, based on research conducted independently by World Wide Worx for Amazon.co.za between April and July this year. The study reveals how extensively digital commerce has taken hold among established, digitally active South African businesses, but also exposes the pressures that threaten their ability to expand.

The sample, drawn from digitally active businesses, show  94% of surveyed businesses have websites and 86% generate revenue online. Nearly two-thirds of active online sellers have traded digitally for at least six years.

The sample was weighted towards established businesses in retail, e-commerce, wholesale and manufacturing, with Gauteng and the Western Cape accounting for 78% of respondents. The findings therefore describe the experiences of relatively digitally mature businesses, rather than the entire SMME sector.

The contrast between digital adoption and operational capability is revealing. Payment systems were cited as a problem by only 12% of active online sellers, but the movement of goods has become a far greater challenge.

Robert Koen, managing director of Amazon sub-Saharan Africa, says the findings reflect the difficulties experienced by sellers using the company’s marketplace.

“These findings reinforce what we hear from sellers every day; the hard part is not getting online, it is managing what happens after a customer clicks ‘buy’,” says Koen. “This is exactly where Amazon can make a difference. Our logistics network, fulfilment capabilities, and seller support tools are designed to take that operational burden off small businesses so they can focus on growth.”

The financial findings reinforce the operational pressures. Almost half of respondents, 48%, cited recurring subscription or administration fees as a barrier to digital adoption, and 41% identified digital transaction fees. By comparison, only 14% regarded initial setup costs as an obstacle.

This has ongoing consequences for the sustainability of a small business, as its profitability can be steadily eroded by the accumulation of transaction charges, delivery fees and returns processing. The costs are difficult to absorb for businesses operating across several sales channels, each with its own requirements.

The research also reveals a large gap between online selling and participation in established e-commerce marketplaces. Among active online sellers, 96% use their own websites, 67% sell informally through social media and 51% through WhatsApp. Yet only 32% use a major online marketplace.

This suggests an opportunity for platforms that can offer businesses access to larger customer bases alongside integrated fulfilment services.

Perceptions of marketplace participation remain an obstacle. Among businesses with one to five employees, 30% believe they are too small to participate, compared with only 6% of businesses employing 51 to 200 people. Application requirements and fees are also significant deterrents, cited by 41% of businesses in each of the two smallest employee categories.

The findings indicate that marketplace operators face an education and support challenge, particularly among smaller businesses that are already capable of selling online but have limited experience with the systems and requirements of larger platforms.

Women lead the online charge

One of the key findings is the strength of women-owned businesses in digital commerce. More than a quarter of female-owned enterprises, 27%, generate between 76% and 100% of their revenue online, compared with 13% of male-owned businesses.

Women-owned businesses are also more likely to participate in major marketplaces, at 38%, compared with 28% of male-owned businesses. Male-owned enterprises, by contrast, rely more heavily on informal social-media selling and WhatsApp.

However, women entrepreneurs have less access to mentorship, with only 41% reporting such support, compared with 51% of male business owners. The combination suggests that women-owned businesses are demonstrating strong capabilities in structured digital selling despite having less access to the guidance that could help them expand.

“Women-owned businesses are already demonstrating the behaviours that lead to marketplace success,” says Suzelle Abe, Amazon’s head of marketplace in South Africa. “They sell online, they adopt structured programmes, and they use AI marketing tools at higher rates.

“But the data also tells us they need more support, particularly around mentorship and managing costs. We see this as both a responsibility and an opportunity to build targeted programmes that help women entrepreneurs thrive on our marketplace.”

AI adoption races ahead of operational use

The research also uncovers a surprising level of artificial intelligence adoption among small businesses, although its applications remain concentrated in marketing.

Of the active online sellers surveyed, 59% use AI for marketing and social media, compared with only 15% using it for sales insights and 13% for customer service automation. Only 4% use AI for inventory and operations management, and just 2% for predictive analytics.

This shows that businesses have enthusiastically adopted AI for producing content and promoting products, but the technology has made relatively little progress in the areas that could directly improve operational efficiency. For example, among businesses with one to five employees, only 2% use AI for this function, increasing to 12% among businesses employing 51 to 200 people.

Yet interest in affordable AI solutions is substantial, with 76% of respondents rating their interest at four or five out of five. Cost, however, is the biggest obstacle, cited by 54%, followed by a lack of technical skills at 37%. Unreliable internet connectivity barely registers as a barrier, at just 2%.

The findings suggest that affordable AI services designed for specific business operations could find a receptive market, especially where they help small companies reduce administration costs or improve their management of stock and customer demand.

* Arthur Goldstuck is CEO of World Wide Worx, editor-in-chief of Gadget.co.za, and author of “The Hitchhiker’s Guide to AI – The African Edge”.