Enabling SME growth through digital capabilities in South Africa

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Enspan is a software company offering a range of digital supply chain solutions for small and medium-sized enterprises (SMEs). SMEs are well known for low tech adoption for a number of reasons, however, COVID greatly contributed to changing that and increasing digital adoption by businesses of all sizes. It also prompted a series of government initiatives around the world to support the growth of SMEs (who were greatly impacted by the pandemic).At Enspan, we believe this is a great opportunity to capitalize on the current trend of digital adoption and explore international markets, especially emerging economies. We identified South Africa (SA) as a potential market. A study of the manufacturing sector in South Africa reports that less than 75% of SMEs have digital stores and less than more than 90% perform procure-to-pay processes manually. This significantly inhibits SME growth! According to the same study, low tech adoption in SA is due to a general shortage of digital skills in the country, lack of access to suitable technology, affordability. SA has circa 200,000 manufacturing SMEs (Enspan's key target customer) creating a sizable target market for Enspan.Additionally (and what makes SA extremely attractive to Enspan), the government issued several regulations to support SME development and growth require corporations to source part of their materials from SME suppliers and spend part of net income on supply chain development. Corporations are currently struggling to comply with such regulations and are looking for solutions. This situation resulted in pools of corporate funding for companies like Enspan to localize and commercialize our product.Why Enspan is a good fit for South Africa and vice versa? We will answer this question during our study, but our going-in hypothesis is that we are perfectly suited to address SA challenges. Enspan has an innovative solution to offer SMEs a low-to-no-integration and low-cost solution to quickly activate e-stores (to support growth) and roll up such e-stores to a centralized marketplace accessible by corporations (to help meet government procurement requirements and spend).During this study we will assess/validate the market and product and develop a market entry strategy for South Africa.