The rapid growth of offshore e-commerce platforms is raising concern across South Africa’s retail sector, with industry stakeholders warning that increased foreign competition is beginning to erode the position of local businesses and small enterprises.
Discussions at the Proudly South African Buy Local Summit and Expo 2026 this week highlighted the extent of the shift, with participants noting that e-commerce now accounts for an estimated 10% of total retail sales in South Africa.
While this growth reflects changing consumer behaviour and increased digital adoption, it is also reshaping the competitive landscape in ways that may disadvantage local firms.
Of particular concern is the impact on employment and small business sustainability. The expansion of offshore e-commerce has been linked to more than 8,000 job losses, as local retailers struggle to compete with international platforms that often operate with larger scale, lower costs and more aggressive digital marketing strategies.
Pressure on local retailers intensifies
The rise of global e-commerce platforms has significantly altered how South African consumers discover and purchase products. Panellists noted that offshore retailers are increasingly dominating digital advertising spaces, from social media platforms to search engines and mobile applications, creating an environment where local brands are less visible to consumers.
Speaking during a panel discussion facilitated by Irshaad Kathrada, participants highlighted how constant exposure to international platforms is influencing consumer preferences and purchasing decisions.
As a result, local retailers are facing mounting pressure not only on pricing but also on brand visibility and customer acquisition. Smaller businesses, in particular, often lack the financial resources to compete with the scale of advertising spend deployed by global e-commerce players.
Amahle Ndlovu, who runs an online athleisure store based in Johannesburg, said the shift is already affecting sales.
“You can feel the difference. Customers will browse locally but end up buying from international sites because that’s what they keep seeing online,” she said. “We simply don’t have the budget to compete at that level of visibility.”
Market consolidation signals deeper strain
The strain on local players is also reflected in recent market developments. The sale of Superbalist to Takealot has been cited as an example of how competitive pressures are reshaping the domestic e-commerce landscape.
While consolidation can strengthen certain platforms, it also points to the challenges faced by standalone local brands attempting to scale in an increasingly competitive environment.
Tshepang Moloi, who operates a small leather goods business supplying both online and boutique retailers, said consolidation reduces opportunities for independent brands.
“When smaller platforms disappear or get absorbed, you lose alternative routes to market,” he said. “It becomes harder for small brands to negotiate space or visibility.”
Implications for SMEs and local production
For small and medium-sized enterprises, the implications of this shift are significant. Many SMEs rely on local retail ecosystems to distribute their products, whether through online platforms or physical channels. As offshore competition intensifies, these businesses risk losing both market access and revenue.
In addition to pricing pressures, SMEs are also affected by the broader structural advantages held by international platforms, including established logistics networks, advanced data analytics and global supplier relationships.
Lerumo Seabi, a small-scale clothing manufacturer in Durban supplying local online stores, said the impact extends beyond retail into production.
“If local retailers are under pressure, it affects us directly because they order less stock,” he said. “We are already seeing smaller orders and more hesitation from buyers.”
At the same time, increased reliance on imported goods through e-commerce channels raises concerns about the long-term impact on local manufacturing and production capacity, which are key components of South Africa’s industrial strategy.
Policy response begins to take shape
In response to these challenges, discussions at the summit pointed to the need for stronger policy interventions to support local businesses. Among the measures highlighted was the potential role of a localisation support fund aimed at strengthening domestic enterprises and improving their competitiveness.
The broader localisation agenda, which seeks to increase the use of locally produced goods and services, is expected to play a critical role in addressing the imbalance between local and offshore players. However, stakeholders emphasised that policy measures will need to move beyond intention and translate into practical support mechanisms for SMEs.
As South Africa’s e-commerce sector continues to expand, the balance between global integration and local economic protection is likely to become an increasingly important policy question. For SMEs, the outcome of this shift will not only determine their ability to compete but also their long-term survival in an increasingly globalised retail economy.
lazola@vutivibusiness.co.za
