#BizTrends2025: The top 5 trends set to define South Africa’s business landscape in 2025

The good news is that, with the Bureau of Economic Research projecting potential economic growth of 2.2% in 2025 and S&P’s recent positive outlook change for South Africa, South African small business owners might see economic growth double compared to 2024.

The formation of the government of national unity (GNU) gives South Africans more reason to be optimistic. Progress may not be entirely smooth, but the combination of a better government, sensible policy, and increased electricity and port availability is a sign that we’re headed in the right direction.

Small business owners can look forward to positive recovery and growth in 2025.

Thomas McKinnon, chief growth officer at Lula, a B2B fintech and alternative funding provider, shares his thoughts on last year’s economic state: “2024 was a year of continued headwinds for SME owners in South Africa – high interest rates, inflation and heightened uncertainty around election time and the formation of the new government have left their mark.”

South African small businesses still face obstacles that hamper growth. Only 33% of SMEs report having access to credit and many small businesses stagnate because of unforeseen challenges. This limits their ability to achieve resilience.

As we head into a new year, by keeping their eyes on the prize, small business owners can overcome day-to-day challenges and be empowered to take full advantage of the new opportunities that digital transformation presents.

As you take a step back to plan for the year ahead with a refreshed perspective, here are the five key South African business trends, ranging from e-commerce to new financial service models, set to shape the business landscape and impact SMEs in 2025:

1. New financial service models

   Technological innovations in banking now offer alternative solutions to SMEs. The financial sector is extending its service offerings from traditional banking to digital tools that allow for smart cash flow management.

   These solutions consolidate the process of financial management, streamlining processes to allow for more cash flow control.

   McKinnon says: “Banks and fintechs are naturally diving into things like cash flow management tools and leaning into AI-driven insights to make cash flow management smarter than ever before.” These financial tools can aid business owners to flexibly grow their businesses in a way that traditional banking does not allow.

2. Tailored flexible funding options

   Increased access to transaction data, payments data, and data overall means lenders now have a better view of a business’s financial health – and can tailor financing options to match each business’s unique needs.

   It’s no longer only banks that are tailoring funding options. Alternative funders are also proliferating. Government and NGO initiatives are also stepping up to support micro and women-owned businesses with guarantee schemes, creating a broader safety net. It would be best to familiarise yourself with alternative types of funding like capital facilities or capital advances to determine which solution would fit your business best.

3. Digital commerce goes mobile

   With e-commerce on the rise, expected to grow at a 21.4% compound annual growth rate (CAGR) by 2030, businesses can expect accelerated internet and mobile penetration.

   Within the online retail space, 77% of South Africans do their shopping on mobile phones, while 54% make their purchases on laptops. This trend is set to create new opportunities and markets for SME owners in 2025 and will enable businesses to reach customers on their phones, not just locally but internationally.

4. Innovative digital payment solutions

   As consumers move toward digital commerce, so do payments. While cash is still king, Payments Roadmap.pdf 58% of SMEs already use digital transactions. The South African payments landscape is rapidly evolving to meet not just digital consumers’ demands but those of digital and bricks-and-mortar businesses. Adopting these solutions is crucial for South African SMEs to break into the growing e-commerce market.

5. Big investment in digital infrastructure and technology

   Digital transformation plays a pivotal role in the country’s future, with projections indicating it could contribute almost 20% to the GDP by 2028 and create 300,000 jobs.

   Companies are investing millions of rands in fibre optic networks and data centres. SMEs can prepare for the transition by assessing their current digital capabilities. What technologies and digital skills exist within your business? Address any digital skills gap that you might encounter and develop a road map for adopting technologies that can help you reach your business goals. Think real-time monitoring and data collection of production processes to maximise efficiency and customer experience.

You can capitalise on these five business trends, and set your SME up for resilience in 2025. Adopting these trends in the new year can open doors for big opportunities. Making the shift into the digital economy is pivotal for business resilience and progress and will require investment.

A capital injection may be all that your business needs to maximise its earning potential in 2025 and take full advantage of the tech advancements. With Lula’s business funding and banking solutions, your business is bound to experience real growth.