Knowledge is power. That is what the 16th-century British poet Francis Bacon said. Yet, today, more than four centuries later, this still rings true. We can even go as far as to add that information – the predecessors of knowledge – is power. Brands and business owners alike are learning that information empowers them to make strategic decisions and develop better products.
The HOSTAFRICA SMB Insight Lab is a collaborative research initiative with EBS Universität für Wirtschaft und Recht. It’s designed to better understand how small and medium-sized businesses build, grow, and sustain online success across Africa. It aims to empower South African entrepreneurs with data-driven insights, tools, and inspiration to grow and thrive.
The 2025 research that focuses on South Africa drew from a sample of 934 people and delivered some interesting insights. Answers were collected through a survey that asked questions about respondents’ business characteristics.
Business Hubs and Business Types
The research confirmed that Gauteng, KwaZulu-Natal and the Western Cape are the biggest business hubs in South Africa. 54% of customers are located in Gauteng, followed by 23%
of customers in the Western Cape, and 12% of customers are located in KwaZulu-Natal.
Additionally, they noted that most respondents (38,45%) operate a small registered business, such as a shop, firm, or agency.
Smaller segments include those managing IT services or websites for others (8,79%), and employees in tech companies or startups (4,60%).
The largest number of respondents (23,31%) work in professional services, such as legal, finance, or consulting sectors. This is followed by online stores or e-commerce businesses (19,92%) and tech products or SaaS companies (12,98%).
Among the agencies or firms, those in marketing or creative agencies (11,40%) and IT or hosting services for others (10,25%).
Smaller segments of businesses represent personal projects or blogs (9,67%) and non-profit or community groups (4,21%). 8,26% are businesses that represent categories that were not listed.
Around 21,47% of respondents identified that they are running a side hustle or informal business, while 15,13% identify as freelancers or independent professionals.
What was also noted was that the respondents showed a strong representation from service-oriented and technology-driven industries.
Managing Micro to Small Businesses
The data showed that nearly half of respondents (43,68%) operate their businesses independently, while another 40,08% work in small teams of two to five people. It highlights that the majority of users are solo operators and small enterprises.
This reinforces other data across sources in South Africa that small businesses are the backbone of the South African economy.
Teams consisting of six to twenty people make up 11,41%, and 4,83% are part of teams with more than 21 members.
42,20% of respondents acknowledge that they use hosting primarily for either a business website or an online store. Another 26,19% focus on offering services to clients, meaning that they either provide the service of hosting, web development, or IT to their respective clients. 10,26% manage websites or e-mail for multiple clients.
An interesting point that HOSTAFRICA noted was that a smaller portion of customers engage in building and deploying apps or SaaS products (5,50%) or testing ideas and learning new skills (4,43%).
Why Research Like This Matters
The reason why it is important that research like this is done and made available to both entrepreneurs and brands is to have a better understanding of what the SME landscape looks like. With a better understanding, policymakers can better serve the small business industry, and entrepreneurs can improve their strategies to build more resilient businesses.
Because small to medium enterprises span a wide number of industries, there is still room for these industry-specific reports to dive deeper into what each industry needs. Where a report such as the HOSTAFRICA SMB Insight Lab report indicates what exactly SMEs use website hosting for, and what kinds of businesses are run, it explains the core characteristics of the small business and how it serves its client base. Entrepreneurs understand that there are many businesses similar to theirs, and brands can develop better support for specific sections of the SME industry.
