South Africa’s largest retailer going after R900 billion goldmine
South Africa’s largest retailer, Shoprite, is making a decisive push into the country’s informal economy, targeting a market estimated to be worth R900 billion.
The move comes as competition intensifies among major players to capture a greater share of spending in townships and other underserved areas.
In a statement on Monday, 16 March, Shoprite announced its planned acquisition of a majority stake in R&A Cellular, a deal that remains subject to regulatory approval.
The group said the move is about meeting customers where they already “live, shop and transact.”
This will be done by expanding access to essential financial and digital services through trusted, community-based outlets such as spaza shops and other informal merchants.
These businesses play a central role in daily commerce across townships and peri-urban areas, often serving as the primary access point for goods and services.
R&A Cellular operates a widely used POS platform that allows informal retailers to sell prepaid airtime and electricity, as well as gaming and entertainment products, while also enabling card-based payments.
“R&A Cellular has built a sound business with a strong management team and a platform that is well regarded in the market,” said Jean Olivier, general manager for financial services at Shoprite.
He added that combining Shoprite’s scale with R&A Cellular’s reach creates an opportunity to broaden access to financial services.
“By combining our scale in everyday financial services with R&A Cellular’s established presence in the informal retail space, we are creating a practical way to expand access to essential services, lower barriers to participation and support the communities that rely on informal retailers every day,” Olivier said.
The group highlighted that the integration of its services into the R&A Cellular ecosystem would allow customers to complete more transactions closer to home.
“For customers, the integration of the Group’s financial and value-added services into the R&A Cellular ecosystem will make it possible to complete more daily transactions closer to home, reducing the cost, time and inconvenience of travelling to shopping centres or banking outlets.”
South Africa untapped R900 billion economy
“For informal retailers, the platform offers access to a broader, competitive range of services that can increase customer visits, improve cash-flow management and reduce reliance on cash, while strengthening their role as essential service providers within their communities,” the group said.
According to a recent report by Standard Bank, South Africa’s informal township economy is valued at around R900 billion, making it one of the most significant and under-tapped sectors in the country.
The economy consists largely of small, often unregistered businesses that do not formally comply with labour or tax regulations.
Despite this, the sector plays a crucial role in absorbing unemployment and providing income for millions of people.
It also supports the broader economy by purchasing goods from formal suppliers and driving consumer spending.
Standard Bank described the informal economy as a “vital engine of economic activity and resilience,” noting that most businesses operate below the VAT threshold of R1 million in annual turnover.
However, a sizeable portion generates between R500,000 and R750,000 a year, underlining the sector’s profitability.
The report also found that many informal businesses have a complicated relationship with formal banking, often relying on personal accounts due to concerns about fees, limited access to credit, and negative past experiences.
However, Standard Bank did note that as businesses increase in scale, there is a noticeable pickup in digital bank transfers.
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