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What are the most successful internet companies in Africa?(October 2017)

Published October 2017

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

I wanted to write this article in preparation for my conference in London next month, at the “Internet of Thing – World Forum”. I also wanted to prepare content for one of my new keynote talk topics.

I want to take this opportunity to repeat myself to the organizers of this forum and again offer a talk at the event. I shared my opinion with the organizers, that their event lacks representation from the continent of Africa, which is the world’s second largest continent. So as to avoid their event appearing incorrectly named, I offered to talk on Africa’s behalf.

I think this forum will also be a good starting point to my next article, which will be on cybercrime and even cyber-bullies. The Internet of Things – world forum – sent me an email after I processed my credit-card for the entrance. The mail stated that confirmation would be sent within two hours. I still waited the following week. After sending follow-up emails, with no response, I got my office to call using the number I provided. My office was informed that the person we needed to talk to was not in. Situations like these instil suspicion, which is also common for people who have suffered cybercrime. I guess we will know in a month’s time what the outcome is of this forum.

Back onto the subject of this article.

There is no summary or single independent source of information on which I can find the most successful Internet companies in South Africa.

Great opportunity for me then!

It was humorous for me to find, during my research on the Internet for this subject, several Internet service providers and media houses as top results in this category. Of course, it is easy to dominate top search results in just about any category if you have the advantage of the Internet under your belt already. This methodology is in part what I would employ within my plan for Zimbabwe’s online reputation management recovery – from my earlier article.

Information is always lacking when interest is lacking.

Perhaps Africa is being excluded because we have less than 10% Internet penetration?

I like to look at a glass half full and say Africa has more than a 90% untapped potential client base, which means that Africa offers the greatest opportunity for web based businesses in the world.

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

How do we define a successful online business? Would it be the company that has the most traffic on its website?

Or would it be the company with the most revenue?

How about the business with the post followers?

Do I include the businesses that have apps?

Should I limit my opinions to those companies that only derive business from the Internet?

I first researched the most successful businesses in South Africa and Africa, to see if any are Internet based or use the Internet to generate the majority of their business.

The big names in South Africa are Standard Bank Group, FirstRand, Sasol, Naspers, Sanlam, MTN Group, Shoprite Holdings, Remgro, Bid Corp and MMI Holdings; none of which fit my definition of Internet based, although MTN data sales is now over 20% of its income.

How about individuals on the Internet who generate a lot of their income from the Internet? Pam Golding does well, so does Sol Kerzner and Kerzner, Donald Gordon, Harry Oppenheimer, Adrian Gore, Nthato Motlana, Patrice Motsepe and Douw Steyn.

But!

None derive the majority of their business from the Internet…although, many use it.

For example, Pam Golding’s main website, according to siteworthtraffic.com, gets around 60 000 plus unique visitors per month. To put it in context, Telkom’s main website, according to the same source, gets 300 000.

A property company, achieving over one fifth of our largest telecommunications companies traffic? That is impressive.

Siteworthtraffic.com is an estimate resource. I can almost assure you the estimates are incorrect. However, they did give a generalized idea and certainly context.

So, onto internet businesses.

Kalahari.com, Amazon.com and Bidorbuy.co.za are the most popular online e-commerce sites in South Africa and much closer to my definition of a web based business.

If we are to include banks, surely FNB or Capitec would feature? Over 70% of people in South Africa use apps to manage their banking.

I would, however, put before any bank, businesses like computicket.com, zando.co.za, spree.co.za and style36.co.za. These companies are truer true-blood web companies, and their names pop up on a lot of research.

Out of interest, computicket.com gets 200 000 unique visitors a month according to siteworthtraffic.com…two thirds of Telkom.

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

Top e-commerce awards, www.ecommerceawards.co.za, do not have 2017 on its website, but you will find that the 2015 awards and the e-Commerce Achievement Award went to Groupon. I find this very interesting because I know someone who worked there and things didn’t sound to great, not to mention that it closed in November. It’s a little confusing, to say the least.

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

I have to then say, too, that my overall choice and, again, a company that pops everywhere in my research is www.yuppiechef.com. This company started in the same suburb as mine and has a traffic estimated at 99 000 unique visitors monthly. (www.siteworthtraffic.com)

99 000 unique visitors per month is extremely good! To generate that amount of traffic, using PCC Google Adwords, you’d have to spend, per month, well over 1.3 million rand if you use the average cost per click.

Unfortunately, there really is not much information on web companies doing well in South Africa.

This is really sad, because it suggests there aren’t many.

Web businesses are ideal for start-ups or small, new enterprises… and this is exactly what South Africa and Africa needs.

I believe hindering reasons for a few web based companies is affordability and access to data in Africa. I did address concerns like this in an earlier article.

There are certainly more product based web companies doing well than service based. This I find interesting, because product based web companies have to deal with distribution issues…

So, what did I find for the websites with the most traffic in South Africa?

In no particular order, but reportedly:

  • News24.co.za.
  • gumtree.co.za.
  • timeslive.co.za.
  • iol.co.za.
  • sports24.co.za.
  • dstv.co.za.
  • autotrader.co.za.
  • bidorbuy.co.za.
  • fnb.co.za.
  • standardbank.co.za.

So, information websites, some services and banking.

Out of these, Gumtree.co.za and bidorbuy.co.za are really the only web based companies fitting my broad definition of pure web based companies.

Bidorbuy.co.za would have to win, because it trades in rands and has its headquarters in Johannesburg.

Gumtree.co.za was started in London, to connect Australians, New Zealanders and South Africans who were either planning to move and needed accommodation.

In Africa,

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

Bidorbuy.co.za pops up again on my research, as well as news24.co.za, then www.vanguardngr.com, www.nairaland.com and www.alwafd.org (research shows high usage… but I honestly can’t tell what the site says), and www.kalahari.net

www.kalahari.net and www.takealot.com have merged and would, therefore, be my assumed top web based traffic business in Africa. I do think www.nairaland.com is a good overall contender. It has a broader reach of users across Africa … makes me think of an older version of Gumtree.

What is the most revenue generated in South Africa with high website usage?

Standard Bank and First Rand. How much revenue is generated from the Internet? I have no idea, but all banks are shifting attention to cell phone applications, therefore, it must mean big business.

Unfortunately, there are no big name companies in terms of overall revenue that are purely web based. This does not mean big money is not being made from the Internet. In general, web based companies have less overheads than a normal company with a shop or office. One can assume that, in general, profit margins in a web based company are good compared to a normal company.

Some context: Standard Bank of South Africa Limited is one of South Africa's largest financial service groups, operating in 20 countries across Africa. Revenue decrease US$ 8.61 Billion (2016). Net income decrease US$ 1.54 Billion (2016).

Kalahari and TakeAlot merged, aiming at around 3 billion rand in annual income.

Now, I know that compared to a bank that is really a very small percentage.

But, try comparing the running costs of a bank to that of Kalahari and TakeAlot?

Kalahari and TakeAlot were, in all respects, the biggest merger of web based companies in Africa that I can find in research.

The Internet only contributes about 2 % of South Africa’s economy.

What about likes and followers in SA?

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

This area is dominated by musicians and bands. In terms of companies, in South Africa, www.news24.co.za pops up in my research again, and then Playboy South Africa.

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

Sissy Boy has a top rank, and it has an e-commerce shop. This might be the most popular pure web based company in SA: www.sissyboyjeans.com

With that said, its web traffic from siteworthtraffic.com is only 4000 unique visitors per month.

How about those with the most used apps in South Africa?

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

Uber, I think, has to be the purebred winner here. In the rest of Africa, there are some more interesting options like www.mfarm.co.ke - offers real-time market prices for crops, matching Kenyan farmers with buyers. Or how about Refugees United - reconnect refugees with their families: www.tinyurl.com - what an excellent initiative.

I have also personally seen M-Pesa – a money transferring app in Kenya. www.safaricom.co.ke

Also from Kenya, MedAfrica – medical related, helps with basic information on conditions and links users to doctors or service providers. www.medafrica.org

The one that I think is the best pure-blood options in Africa is the Africa Travel Guide: TomsApps.com suite of world travel guides. The Africa Travel Guide has comprehensive information of over 1 000 destinations. The reason I love this one is because it bypasses the main challenge, which is access to data/the Internet, and this app can work the majority of its tasks with no Internet connection!

Worldwide, no really big name companies come from Africa at all. Actually, I could not find even one.

What is interesting is that on the list I found, one of the local companies doing well worldwide did not work in South Africa. I am referring to Groupon.

Here is the complete list for interest’s sake:

  • Amazon.
  • Google.
  • Facebook.
  • Tencent.
  • Alibaba.
  • Baidu.
  • Priceline Group.
  • eBay.
  • Netflix.
  • Expedia, Inc. v
  • Rakuten.
  • Salesforce.com.
  • Yahoo.
  • ODIGEO.
  • NetEase.
  • Zalando.
  • Groupon.
  • LinkedIn.
  • Twitter.
  • Naver.
  • Corporation.
  • Cimpress.
  • TripAdvisor.
  • Flipkart.
  • ASOS.com.
  • Yandex.

One can deduct the already obvious here; that being, what works worldwide, might very well fail in Africa.

Jean-Pierre Murray-Kline - Internet & Social Media Specialist

With that said, Africa does have a unique variety of innovative web based companies and apps, designed of local challenges and needs. For example, education! Everyone knows Africa struggles to accommodate and educate its people, but look at this great initiative from South Africa: www.schoolinabox.co.za

If we just Google the most needed services and products in Africa, it is not hard to find several un-explored needs that could do well with the benefits found using a web based platform. Fields like personal care, entertainment, transport and logistics, information and technology.

Unfortunately, this article’s conclusion is that Africa has not yet begun to show its potential for web based companies. Successful Internet companies in Africa are still to come.

Published October 2017

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