The Competition Commission has published its first Rural and Township Economy Report, and it puts numbers on how far township and rural businesses sit outside online retail. Just 11% of township businesses and 9% of those in rural towns sell through online marketplaces.

Only 11% of township firms and 6% of rural ones run their own e-commerce sites. Around half, 51% in townships and 48% in rural towns, still rely on walk-in trade at a physical store.

The demand side is thinner still. Online customers account for 7% of township businesses' reach and 5% in rural towns, with most owners reporting that residents are their main and often only market. Asked why they do not sell online, nearly a quarter said their business was not registered or did not meet the requirements, 24% in townships and 23% in rural towns.

Limited knowledge of how to sell online was cited by 15% and 19%, and missing infrastructure by 15% and 20%. But the second largest constraint in townships was not exclusion at all: 17% said online simply was not an appropriate route to market for them, rising to about 20% among independent rural firms.

The commission reads the overall picture as informality, capabilities and infrastructure, and says low uptake reflects latent demand rather than disinterest, with many firms saying they would sell online if barriers came down. We’re not convinced that’s the real situation; it’s much more likely that their business model doesn’t require the actual sale to occur digitally.

TechCentral reported the launch and noted the finding on channel appropriateness sits awkwardly beside the report's wider argument about latent demand. The report itself ties the structural constraints back to the Online Intermediation Platforms Market Inquiry, arguing that platform rules, search rankings, commissions and fees decide whether small sellers can compete at all. Commissioner Doris Tshepe framed the goal as township and rural residents being able to expand beyond the Kasi economy into formal malls and online purchasing.

Put this next to what the market is doing: Online retail just reached about a tenth of all South African retail turnover, and Shoprite has bought a majority stake in a platform with 15,000 payment terminals in spaza shops, while Lesaka runs 90,000. So the payment rails have reached these businesses. The selling rails have not.

That is the specific gap, and it explains why 24% named registration as the barrier: you cannot list on a marketplace you cannot invoice from. For anyone building here, the useful signal is that 17% said online is the wrong channel for them.

Not every business needs a storefront. Some need working capital, stock finance or delivery, and the Commission says its next steps are advocacy and further research rather than a single intervention.

You might also like our piece on Shoprite buying into spaza payment rails, why small merger notification now catches deals the Commission wants to see, and how South Africa's business regulation compares on restrictiveness.

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