‘Digital commerce is more than just a trend. It’s actually creating new opportunities and markets for SME owners.’
South Africa’s economy has not been easy on businesses, as most small and midsize enterprises (SMEs) struggle to keep their doors open.
2024 continued to be a tough year for SMEs as they experienced high interest rates, inflation, and high electricity tariffs.
Thomas McKinnon, chief growth officer at Lula says there are five key business trends that will help SMEs succeed this year.
Good news for SMEs
McKinnon adds that the Bureau of Economic Research’s projections show potential economic growth of 2.2% in 2025, which could result in SME owners seeing economic growth double compared to 2024.
For SMEs to take full advantage of the good news, McKinnon suggests they stay ahead of emerging trends to capitalise on opportunities in the new economic landscape.
ALSO READ: Three ways for SMEs to level up their financial literacy
Five trends business owners should be acting on in 2025:
1. Flexibility is king: New financial service models for SMEs
He says it is important for SMEs to bank with financial institutions that offer digital cash flow management tools.
It is important because these tools will help business owners have the flexibility to grow their businesses in a way that a traditional bank doesn’t allow.
“More than just cash flow insights tools, we’re seeing a rise in flexible services that can adapt to the ebbs and flows of SME growth in reality – from office spaces that scale with business size to more flexible logistics providers and marketplace aggregators that simplify operations.”
ALSO READ: Tips for SMEs: How to secure a financial boost
2. Funding gets personal: More financing options, better fits
McKinnon says lenders are using data to tailor financing options to match businesses.
“With tailored financing offered by more players in the lending market, getting approved for funding will become easier for the 67% of businesses that traditionally haven’t had access to credit.”
He adds that the appropriate finding can be a make-or-break factor for small businesses looking to grow or navigate challenging economic periods.
Therefore, it is important for business owners to familiarise themselves with alternative types of business funding, such as capital facilities or capital advances.
“To better plan and prepare for your funding needs, look into your cash flow and make a cash flow projection to prepare for challenges in the coming months.”
ALSO READ: Amazon launches ‘Shop Mzansi’ to support local small businesses
3. Mobile first: Digital commerce booms and goes mobile
He says most SMEs should consider having their businesses online, as a digital shift is currently happening.
Increased internet penetration drives this shift, growing from 68% in 2023 to over 75% by 2025.
“Digital commerce is more than just a trend. It’s creating new opportunities and markets for SME owners.”
He advises SMEs to invest in a user-friendly e-commerce website and online services that are fully optimised for mobile devices.
“Consider partnering with tech-savvy businesses or joining online marketplaces to increase your online presence.”
ALSO READ: South Africans move to contactless payments
4. Just a swipe away: Payments are getting smoother
The world is moving towards a contactless economy, and it is important for small businesses to get on board.
McKinnon says 58% of SMEs already use digital transactions. “Offering digital payment services as an option to customers is crucial for SMEs to break into the growing e-commerce market.”
He advises business owners to implement mobile wallets and QR code payments or offer EFT services for e-commerce transactions.
5. In the cloud: Investments in digital infrastructure and tech
He adds that digital technologies like artificial intelligence (AI), and cloud computing have the power to transform traditional sectors and SMEs making use of these and other emerging technologies.
“Think of real-time monitoring and data collection of production processes, improving efficiency and customer experience, and automating routine tasks.
“All of these technological improvements give your SME an edge and could allow you to compete with other bigger businesses.”
He says 73% of African SMEs that have adopted technological solutions increased their competitiveness, while 87% said it accelerated business growth.
“You can prepare your business by first assessing your current digital capabilities.
NOW READ: Five key entrepreneurship trends to watch out for 2025
