Internationalization of digital businesses has been a growing trend globally and in South Africa, reflecting the increasing importance of digital technology and the internet in driving economic growth and competitiveness. According to an article by the World Economic Forum, South Africa is home to a growing number of digital start-ups, many of which are seeking to expand their reach beyond the country’s borders[1]. The report also highlights the growing number of South African businesses that are leveraging the internet and other digital technologies to access new markets and customers, as well as to increase their operational efficiency and competitiveness[2].
According to a World Bank report, there has been a surge in the emergence of digital start-ups and platforms across various technology segments. The report highlights that a number of successful tech start-ups have raised more than $100 million, and there is an increase in the number of medium-sized technology companies in South Africa[3].
This growth is being driven by a number of factors, including increased access to high-speed internet, the growth of e-commerce, and the development of new digital technologies and platforms.
Globally, the internationalization of digital businesses is being driven by a number of trends, including the growing importance of the internet in driving economic growth and competitiveness, the increasing number of digital start-ups and entrepreneurs, and the growth of e-commerce and other digital technologies. According to a Statista report, the global retail e-commerce sales in 2021 amounted to approximately 5.2 trillion US dollars[4]. This report forecasts that this figure is expected to grow by 56 percent in the coming years and reach about 8.1 trillion dollars by 2026[5], reflecting the growing importance of digital technology in driving economic growth and competitiveness.
For small businesses in South Africa and around the world, the internationalization of digital businesses presents both opportunities and challenges. To take advantage of these opportunities, small businesses should focus on developing their digital capabilities and leveraging digital technologies and platforms to reach new customers and markets. This may involve investing in new technologies, partnering with other businesses, or leveraging existing digital platforms and ecosystems.
Small businesses in South Africa and around the world should also be mindful of the challenges associated with internationalization, including the need to navigate complex regulations and laws, the need to build and maintain strong relationships with customers and partners, and the need to compete in global markets. To overcome these challenges, small businesses should consider seeking out professional advice and support from organizations such as trade associations, incubators, and accelerators.
Key point on going digital:
- Start by researching the market opportunities and trends in the countries you are interested in expanding to.
- Look into the legal and regulatory requirements for selling products or services in the target country, including taxes and customs duties.
- Consider partnering with a local company to help with the logistics of expanding into a new market.
- Make sure your website is optimized for the target audience, including language and currency support.
- Offer competitive shipping options to attract international customers.
- Utilize social media and other digital marketing channels to reach a global audience.
- Continuously monitor and analyse your international sales and customer feedback to make improvements and adjust your strategy as needed.
The internationalization of digital businesses is a growing trend, transforming the global economy and creating new opportunities for businesses of all sizes. For small businesses in South Africa and around the world, the key to success is to focus on developing their digital capabilities and leveraging digital technologies and platforms to reach new customers and markets. With the right strategies and support, small businesses can thrive in the rapidly evolving digital economy and capitalize on the opportunities of internationalization.
[1] Aimée Dushime, These four countries are leading Africa’s start-up scene — here’s why, World Economic Forum, 24 August 2022, retrieved from https://www.weforum.org/agenda/2022/08/africa-start-up-nigeria-egypt-kenya-south-africa/
[2] ibid.
[3] World Bank Group. 2018. South Africa Digital Economy Assessment. Background paper series Digital Entrepreneurship Pillar, World Bank Group, 2018, https://documents1.worldbank.org/curated/en/699031586325347439/pdf/South-Africa-Digital-Economy-Assessment-Digital-Entrepreneurship-Pillar.pdf
[4] Stephanie Chevalier, Retail e-commerce sales worldwide from 2014 to 2026, 21 September 2022, retrieved from https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
[5] ibid.