10 ‘thriving industries’ for hopeful South African entrepreneurs
While there are still numerous challenges to starting a business, SME South Africa emphasises that there are many “thriving industries” that present great opportunities for budding entrepreneurs.
Starting any business is tough, but doing so in South Africa’s challenging economic climate makes the battle seem even more uphill.
Economic challenges like high unemployment, economic volatility, infrastructure issues, complex regulations, bureaucracy, corruption, and global economic factors.
While these highlight that there are immense challenges starting, maintaining and growing a business in South Africa, the country still offers numerous opportunities for entrepreneurs to not only start their business, but make it thrive.
“Thinking of starting a business in 2024? Then you need to make sure you’re entering a thriving industry, one with enough demand,” said SME South Africa.
“The good news is that South Africa presents enormous opportunities for the right SMEs, with many thriving industries available,” they added.
According to the one-stop-shop for business owners, the biggest areas of opportunity that SMEs in South Africa should consider include:
- Technology and Software Development;
- Renewable Energy;
- Agriculture and Agribusiness;
- Healthcare and Biotechnology;
- E-Commerce and Online Retail;
- Tourism and Hospitality;
- Education Technology (EdTech);
- Financial Technology (FinTech);
- Green and Sustainable Business;
- Health and Wellness Services.
“These are some of the most popular and growing sectors for SMEs to enter in South Africa right now. However, plenty of other industries exist that offer major opportunities,” said SME South Africa.
“As long as you have a solid business plan, and understand market demand, there’s no reason not to build a thriving business in 2024.”
It is important to note that these industries are earmarked as possessing significant opportunities due to increasing demand, however entering these markets does not automatically constitute/guarantee success.
Technology and Software Development
South Africa’s technology sector has been steadily growing, presenting major opportunities for SMEs in software development and IT services.
According to data from Statista, in 2024, the projected revenue in the software market in South Africa alone is estimated to reach US$2.46 billion (~R43.75 billion).
“With the increased adoption of digital solutions across industries, there’s a strong demand for innovative software applications, cybersecurity services, and IT consulting,” said SME SOuth Africa.
SMEs that focus on tailored solutions for businesses, like custom software development, “should have plenty of opportunities available,” they added.
Renewable Energy
There’s a global push for sustainable and renewable energy sources to combat climate change.
In South Africa, this demand is even greater, as the country has been struggling with its electricity grid and supply, and has begun opening up the electricity market with a considered focus on renewables.
Over the past several years, the prevalence of households and businesses investing in renewable energy solutions in South Africa has skyrocketed.
According to research from Mordor Intelligence, it is estimated that South Africa’s renewable energy market projected to soar from 16.58 GW in 2024 to 28 GW by 2029.
“The renewable energy sector, including solar, wind, and bioenergy, is on the rise [and] SMEs can enter this space by providing solar panel installation services, developing energy-efficient tech, or participating in government-backed renewable energy projects,” said SME South Africa.
Agriculture and Agribusiness
South Africa’s diverse climate and fertile land make agriculture a key sector.
According to Mondor Intelligence, the market size of agriculture in South Africa is estimated at R286.69 billion in 2024, and is expected to reach R413.31 billion by 2029, growing at a CAGR of 7.60% during the forecast period (2024-2029).
“SMEs can explore opportunities in organic farming, agro-processing, and niche agricultural products and collaboration with local farmers, implementing new tech solutions in farming, and exploring sustainable agricultural practices are all ways that SMEs could focus on this sector in 2024,” said SME South Africa.
Healthcare and Biotechnology
“The healthcare sector in South Africa is expanding, and SMEs can play an important role in contributing to medical technology and biotechnology,” said the company.
“There are always opportunities for developing innovative medical devices, diagnostic tools, and biopharmaceuticals [and] government initiatives supporting local innovation in healthcare also exist to help boost the growth of SMEs in this sector,” they added.
E-Commerce and Online Retail
The rise of e-commerce is reshaping the retail landscape in South Africa.
According to research from Rand Mutual Bank, the value of e-commerce transactions in South Africa is expected to surge 150% to R225 billion by 2025 in response to a marked shift in consumer behaviour and also changed expectations.
“As a small business owner, this is one of the best ways to establish and grow a thriving retail business.”
“SMEs can tap into e-commerce by establishing online stores, leveraging digital marketing strategies, and providing unique products or services. South Africa also has a growing network of logistics and last-mile delivery solutions, making it more convenient to start an online store.”
Tourism and Hospitality
Following the big hit it took due to the Covid-19 pandemic, South Africa’s tourism industry is once again flying high, which means many tourism opportunities exist for SMEs.
Travel and tourism added nearly R234.82 billion to the Gross Domestic Product (GDP) of South Africa in 2021.
SME South Africa said that entrepreneurs can focus on niche markets, such as eco-friendly lodges, cultural tourism experiences, or adventure tourism.
“Many tourism businesses are relatively easy to start up and can be a great way to get a foot into one of the country’s busier industries,” they added.
Education Technology (EdTech)
The education sector is evolving with the integration of technology, creating new opportunities for SMEs in EdTech.
“As South Africa has such a strong demand for improvement in education, there’s a lot of opportunity to create innovative EdTech solutions,” said SME South Africa.
Innovations in e-learning platforms, educational apps, and interactive content offer a whole new world of opportunity for startups.
Financial Technology (FinTech)
FinTech is reshaping the financial services landscape in South Africa.
SMEs in this sector can focus on developing digital payment solutions, peer-to-peer lending platforms, or blockchain-based financial services. Addressing financial inclusion challenges, particularly in underserved communities, also presents a significant opportunity.
“Collaborating with traditional financial institutions and sticking to all of the regulatory frameworks are crucial for the success of FinTech SMEs in the evolving financial ecosystem.”
Green and Sustainable Business
Sustainability is becoming a priority for many businesses and consumers alike, meaning that there is a demand for all kinds of businesses that offer sustainable solutions.
“SMEs can explore opportunities in eco-friendly product manufacturing, waste management solutions, or sustainable packaging.”
“Implementing circular economy practices, reducing carbon footprints, and gaining eco-certifications can help to improve the market appeal of green businesses,” said SME South Africa.
Health and Wellness Services
There’s an increasing focus on health and wellness around the world, which presents opportunities for SMEs to provide a range of services.
SME South Africa said that integrating technology, such as health monitoring apps and personalised wellness programs, is also a great way to make ones mark this growing sector.
Read: Why it costs up to R365,000 to create a job in South Africa
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