South Africa tells small businesses to innovate, use social media, identify market gaps and develop products larger companies have overlooked. But what happens when success itself makes a small business vulnerable?
Social media creates a paradox. TikTok, Instagram and Facebook allow small businesses to reach large audiences cheaply. Yet viral posts can also reveal valuable information about consumer demand. What begins as marketing can become market intelligence. Competition requires firms to learn from markets, and entrepreneurs cannot own every business idea. Large firms also create value through supply chains, technology and distribution, while consumers can benefit when successful ideas spread. The concern is therefore not imitation itself. It is whether small businesses can capture enough of the value created when they take the initial risk of identifying and validating new opportunities.
Consider Skubu. In June 2025, the Council for Scientific and Industrial Research announced its launch in Diepsloot by technology start-up Sonke. The refill-store model allows customers to buy essential goods in affordable quantities while reducing packaging waste, supported by Sonke’s IoT-enabled refill stations and proprietary back-end software. In August 2026, Shoprite piloted FillRite refill stations offering essential products in variable quantities. There is no public evidence that Shoprite copied Skubu, and refill retail predates both initiatives. The comparison illustrates how small and large firms can enter similar markets with very different capacities to scale.
That challenge is broader than this example. The Department of Small Business Development’s 2026/27 Annual Performance Plan notes that many MSMEs lack the scale, capabilities and market access needed to benefit fully from market opportunities.
A related issue arises with Clicks Group’s launch of KwaMakhi in Tembisa in August 2026, a township-focused convenience format selling smaller pack sizes and everyday products. Again, there is nothing inherently wrong with a large company entering township markets. Consumers may benefit from lower prices, greater choice and reliable supply. Protecting SMMEs should not mean shielding them from legitimate competition.
However, a policy tension remains. Government invests public resources in developing township enterprises through finance, training, infrastructure and market-access programmes, while large corporations increasingly see those same markets as opportunities for expansion. The Competition Commission’s Grocery Retail Market Inquiry found that competition between national supermarket chains and spaza shops is asymmetric and identified high concentration and significant barriers to entry and expansion in formal grocery retail.
These examples do not establish a widespread national pattern. They raise a broader structural question about whether small firms can retain and scale the value they help create in markets dominated by much larger firms. This can be understood as entrepreneurial value-capture asymmetry, where smaller firms bear much of the cost of identifying and validating opportunities but possess fewer of the assets needed to capture value once those opportunities become visible.
Innovation research has long found that firms that identify new opportunities do not always capture most of the value created by them. Value often accrues to firms that control complementary assets such as distribution networks, manufacturing capacity, marketing systems and customer reach, as Teece’s research on profiting from innovation established.
Although South Africa’s SMME policy increasingly emphasises growth, market access and scalability, less attention appears to be given to whether small firms can retain and capture the value of the opportunities they identify and validate. The National Small Enterprise Amendment Act of 2024 offers one avenue for examining this problem. It establishes the Small Enterprise Ombud Service and allows certain practices affecting small enterprises to be declared prohibited unfair trading practices where they harm sustainability or competitiveness.
Policy should therefore focus not on preventing competition but on improving the conditions under which small firms can capture value. Corporate-SMME partnerships show another route: Shoprite reported that its Next Capital programme supported 87 SMMEs in 2025 and brought 27 new vendors into its supply network.
Stronger routes into retailers’ supply chains, licensing, investment, joint ventures, supplier-development agreements and affordable mechanisms for resolving unfair trading disputes can help smaller firms grow alongside larger ones. When a retailer identifies a promising product or business model from a small South African enterprise, the question should not only be, ‘Can we make this?’ It should also be, ‘Can we help this entrepreneur supply it at scale?’
Going viral should create a pathway to scale. Where larger firms identify promising opportunities emerging from South Africa’s entrepreneurial economy, the objective should not be to prevent competition but to ensure that small businesses have realistic opportunities to participate in the value that follows. A growing economy needs both entrepreneurial discovery and mechanisms that help successful innovators grow with the market they create.
Dr Sizile Zamandlovu Makola is a senior lecturer in the College of Economic Management Sciences (CEMS) at Unisa. She writes in her personal capacity.
