Getting spaza shops into cyberspace

Providing informal businesses with online visibility and digital payment systems will boost revenues for a burgeoning part of the economy, allowing more jobs to be supported by the country’s smallest businesses.

This is according to André de Wet, the founder of digital business platform Flood. He said the informal sector, worth an estimated R1-trillion, required enhanced visibility to access and service communities.

“We believe that we can massively change the economy in South Africa … to create a scenario where those 700,000 spaza shops … are suddenly available and discoverable on a digital platform. And if everybody has access to that platform, they can then discover the stores near them,” he said.

Flood was established in 2021 and plugs into the back end of telecoms companies to provide an online presence for informal businesses. Flood plans to roll out in South Africa at the end of the year to grow its estimated 9-million consumers on the continent.

“There is a very keen desire for a small business to get into the digital economy,” De Wet said.

It’s based on geo-located search — meaning that as you open your app, it shows you the stores and service providers in your immediate vicinity

—  André de Wet, founder of digital business platform Flood

“We found that if one creates a platform where a small business can on-board themselves and then be discovered by a large audience … it increases massive engagement. And the whole basis around that is that it’s based on geolocated search — meaning that as you open your app, it shows you the stores and service providers in your immediate vicinity.”

De Wet said 28% of the population in the Maldives used Flood to find local services, products, deals and specials.

Haroon Bhorat, professor of economics at the University of Cape Town, has recently said the impact of the informal sector on the economy has been overstated.

But banks and telecom companies are increasingly looking to provide solutions to informal businesses through digital wallets and loyalty programmes, De Wet said.

Asked about former Capitec CEO Gerrie Fourie’s view that StatsSA employment data does not adequately account for income in the informal economy, De Wet said that once informal businesses are more visible online, it will enhance activity and generate enough revenue to create jobs.

Meanwhile, the G20 held its digital economy working group meeting in Cape Town this week. Nonkqubela Jordan-Dyani, director-general at the department of communications & digital technologies, said the forum identified digital inclusion as a key priority.

“We know that there are still about 2.6 billion people [globally] who remain offline. The offline [population] is not necessarily [a result of] … vacant infrastructure,” she said. “It’s also about the issues of digital access, access to affordable devices, as well as a reasonable network... We really want to support… indigenous local innovation and not constantly be consuming things from outside.”

Mauricio Zuazua, the regional chair of Kearney in the Middle East and Africa, said integration of SMEs into the digital economy and the adoption of AI to improve efficiencies were crucial.

“The the [data] is telling us that those who adopt this quickly and scale it will be at an advantage. So businesses in South Africa must lean in,” Zuazua said, acknowledging that many other problems and opportunities were also jostling for attention.

In its recent 2025 World Trade Report, the World Trade Organisation said initiatives such as digital trade for Africa helped developing economies build the infrastructure, regulatory capacity and skills to participate in the digital economy.