In a remarkable testament to resilience and innovation, South Africa’s small business sector is undergoing a transformative boom, as highlighted in Yoco’s latest 2025 Exchange report.
With over 200 000 entrepreneurs harnessing digital tools, these businesses have collectively processed an astounding 173 million transactions, equating to a remarkable growth exceeding R500 million in just one year.
This surge underlines the crucial role of small businesses in the economy.
Yoco’s CEO, Katlego Maphai said, “Small businesses are the heartbeat of our economy. What we’re seeing in our data isn’t just resilience, it’s a transformation of how entrepreneurs operate, compete, and win.”
Retail leads the way
The report revealed that retail merchants, who have adapted to the changing landscape by leveraging Yoco’s digital solutions, reported an impressive R74 million in revenue growth.
Gauteng is depicted as a leading region in this digital shift, boasting a 22% increase in merchants and 20% larger average basket sizes compared to the Western Cape.
Notably, online sales via Yoco Gateway in Gauteng outperform those in the Western Cape by 35%, and surpass Mpumalanga by an astounding 82%.
Food and beverage sector excels
However, it is the Food and Beverage sector where the Western Cape shines, producing an impressive 24% more revenue than Gauteng despite having 31% fewer merchants in the area.
Targeted marketing strategies, particularly weekend brunch promotions, have driven over 20% of revenue in Cape Town alone, with Fridays and Saturdays recorded to yield a 14% sales increase compared to weekdays.
Beauty boom in December
The Hair and Beauty sector, particularly vigorous in Johannesburg, is a standout contributor to the small business boom, with an annual revenue generation exceeding R324 million.
December proves to be a critical month for this sector, witnessing a 28% increase in revenue nationwide.
Furthermore, digital channels have become pivotal, with 43% of beauty product purchases now conducted online through Yoco Gateway.
Digital adoption as a catalyst for growth
The undeniable impact of digital tools becomes pronounced, especially in the wake of the Covid-19 pandemic, which forced many businesses to adopt digital solutions for survival.
Merchants utilising Yoco’s Point of Sale systems reported a 32% increase in revenue, while those in the Food and Beverage sector saw an even more substantial growth of 41%.
This shift towards digital is not merely a trend; it’s emerging as an essential approach to thrive in the contemporary market environment.
Three pillars of small business success
According to Maphai, Yoco’s data highlights three fundamental pillars for success in 2025: Timing Mastery, involving an understanding of peak trading periods; a Digital First Approach, where digital capabilities become essential rather than optional; and Smart Capital Deployment, which accelerates growth through strategic financing.
A ripple effect of prosperity
“These 173 million transactions represent more than commerce; they signify job creation, community building, and grassroots economic resilience,” Maphai aded.
The benefits of this entrepreneurial boom extend beyond individual businesses; they enhance regional economic diversification, nurture thousands of families, and drive a necessary digital transformation.
“The entrepreneurs using our platform today are more sophisticated, data-driven, and successful than ever,” Maphai said, reflecting the positive trajectory of South Africa’s entrepreneurial landscape.
BUSINESS REPORT
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