South Africa IoT Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022-2027)

South Africa IoT Market is segmented By Component (Hardware, Software, Connectivity, Services) and By End-User Industry (Manufacturing, Transportation, Healthcare, Retail, Energy and Utilities, Residential, Government )

Market Snapshot

South Africa IoT Market Forecast
Study Period: 2020-2027
Base Year: 2021
CAGR: 19.12 %

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Market Overview

  • The South Africa IoT market is expected to register a CAGR of 19.12% during the forecast period (2022-2027). The rising Internet user in the country is expected to contribute to the market growth. According to Kepios, South Africa was ranked 4th in the internet users in Africa as of January 2022. The rising use of the internet is due to the shifting of Retailers to IoT, increasing mobile internet users, and Online orders.
  • The ongoing digital transformation across the country is supported by IoT technology, which is empowering the next-generation business model. Increasing adoption of connected devices and technology proliferation has enabled numerous companies to augment digital transformation and unlock operational efficiencies. IoT technology also acts as a stepping stone to digitally transforming numerous organizations. The increasing adoption of IoT technology across end-use industries, like automotive, healthcare, and manufacturing, will drive market growth in the projected time frame. Additionally, rapidly increasing urbanization and growing smart city initiatives such as Lanseria Smart City and Century City are expected to pave the way to support the growth of new and emerging technologies such as IoT, Big Data, and Artificial intelligence.
  • The increasing proliferation of mobile and IoT devices in healthcare, agriculture, and smart home applications is expected to support market growth in the projected timeframe. Leveraging IoT with mobile applications offers improved workflows and convenience in everyday life. For instance, the number of mobile internet users in South Africa is expected to increase from 57.3% in 2022 to 67.48% in 2026.
  • Additionally, the rapid growth and technological advancement in big data and data analytics are expected to support the growing IoT market, as these are vital for the effective functioning of IoT. Big data is fuelling artificial intelligence and IoT, which drives the connected and IoT devices. IoT can help derive the real value from intelligent insights from smarter connected devices, which will pave the way for new businesses. An enormous amount of data is generated with billions of devices connected to IoT. Big data Analytics analysis the data to discover, interpret, and communicate meaningful patterns in data that impact business.
  • Surging the importance of data and the rising need for timely decision-making by companies to make real-time decisions and analyze customers' buying patterns, future trends are expected to support market growth. The IoT devices include connected machines, cars, meters, point-of-sale terminals, sensors, consumer electronics and appliances, and wearables. All these devices generate data at a faster pace, which requires analytics to get actionable information.
  • However, with integration complexities in legacy infrastructure, one of the biggest concerns of working with a legacy system is its vulnerability and risk of exposure to security threats. The integration process is prone to security risks due to the transfer of sensitive data between on-premises and cloud solutions and the non-availability of software patches.
  • COVID-19 will significantly impact South Africa's economy in 2020. The country's government has recently lifted the restrictions on travel and movement of goods and services, which enabled transportation but with all safety measures and social distancing norms. The IoT market in South America declined in the initial phase, as numerous IoT projects were put on hold or slowed down. Many companies reduced their investments in new projects to survive the market crises.

Scope of the Report

Internet of Things refers to the collective network of connected devices and the technology that facilitates communication between devices and the cloud and between the devices. South Africa IoT Market is segmented By Component (Hardware, Software, Connectivity, Services) and By End-User Industry (Manufacturing, Transportation, Healthcare, Retail, Energy and Utilities, Residential, Government )

Component
Hardware
Software/Platform
Connectivity
Services
Component
Hardware
Devices
Software and Services
Communication and Connectivity
End User Industry
Manufacturing
Transportation
Healthcare
Retail
Energy and Utilities
Others (Residential, BFSI, Agriculture)

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Key Market Trends

The Retail Segment to Witness a Significant Growth

  • Retail businesses are not extensively using IoT devices, and the things that power the IoT are not widely available in South Africa. Other barriers which limit the uptake are the cost of IoT devices and bandwidth in South Africa. However, the benefits of the IoT outweigh its challenges. The increase in IoT retail spending will support IoT market growth in South Africa. For instance, the moving tactics, a South African digital signage solutions company stated that leading African retailers are beginning to adopt IoT technologies to improve their services, products, and most importantly, the retail experience they offer their customers.
  • The IoT in retail also helps in real-time inventory monitoring. Numerous consumers are actively embracing the world of online shopping. Research has shown that online shopping is rising steadily in many African countries, such as South Africa, Libya, Mauritius, Kenya, and Namibia. However, online shopping is still in its initial phase in Africa. A large customer base prefers to visit a store to purchase needed goods. At the same time, some will order their items online but still like to retrieve them themselves. This is why effective, real-time inventory monitoring via the Cloud is of the utmost importance. Nothing damages a company's reputation more than a product stock out, as it reduces customer satisfaction and lowers loyalty levels.
  • The increased consumer spending will have a positive impact on retail sales. The retailers in the country are infusing more tech to tap into the growing demand. For instance, according to SARB, consumer spending went down from ZAR 3.02 trillion in Q1 2020 to ZAR 2.4 trillion in Q2 2020. However, it soon showed growth and reached ZAR 2.98 trillion in Q4 2021.
  • Additionally, in November 2021, Shoprite Group's, one of the most recent retail innovations, launched a trial of Checkers Rush, an automated, cashless, cashier-less concept store, according to a press release. Leading retailers in Africa have started to adopt IoT technologies to improve their products, services, and, most importantly, the retail experience they offer their customers. Moreover, Samsung and Moving Tactics have partnered to deliver integrated technology-driven marketing solutions to various clients, including mobile telecommunications operators and international QSRs to national fashion and beauty retailers.
  • Also, Moving Tactics, a digital signage solutions company in South Africa, will employ integrated technologies and data, like those used online, to tailor the in-store experience to a specific customer.
South Africa IoT Market Report

Growing Markets in Africa is Expected to Propel the Demand for IoT

  • South Africa is considered one of the fastest-growing IoT markets in the MEA region. The Internet of Things (IoT) is expected to drive benefits through billions of connected devices receiving data for appropriate use. The growing manufacturing, telecommunications, logistics, transport, and government sectors lead toward IoT adoption in South Africa.
  • Additionally, numerous players worldwide are trying to enter the South African market to increase their market presence. For instance, In June 2022, Macrocomm Group signed a joint venture agreement with Germany’s Bosch to build internet of things (IoT) devices and sensors at Bosch’s manufacturing facility in Brits, Pretoria. The devices, developed by Macrocomm, will support a range of consumer and business use cases for both local and export markets.
  • Also, other players are following organic and inorganic strategies to strengthen their footing as a global technology. In January 2022, The Amber Group continues its global expansion with another acquisition in South Africa. The company has acquired a full stake in IoT hardware manufacturer Intelli-Business Solutions Limited (Pty) Limited (IBS), to be renamed Amber IoT. The acquisition will strengthen Amber Group’s footing as a global technology company, as it now adds to its offering to design, develop, and manufacture its electronic hardware. This serves to complement its world-leading software development expertise and solutions.
  • Moreover, the Increasing penetration rate of the Internet in Africa is also expected to stimulate the growth of the IoT market In Southern Africa. For instance, as per DataReportal, Southern Africa has the highest internet penetration rate in Africa as of January 2022, which is 66%. The Internet penetration in South Africa was even above the world average of 62.5%. On the other hand, Eastern and Middle Africa had the lowest rates of 26 % and 24%, respectively.
South Africa IoT Market Analysis

Competitive Landscape

  • In February 2022: Singapore-based company UnaBiz, a massive IoT service provider, and Astrocast, which operates a global nanosatellite IoT network, agreed to develop an end-to-end IoT solution for asset tracking and monitoring. The partnership will combine Astrocast's connectivity technologies with UnaBiz's custom design expertise in IoT sensors and data platform services. It will help Astrocast extend its SatIoT services' reach to a wider market in multiple verticals across Asia, Europe, and South Africa, enabling more businesses in these regions to benefit from a disruptive technology that opens so many possibilities.

Recent Development

  • In May 2022: Untapped Global launched its public beta platform, which uses real-time data to provide transparency for investors looking to tap into Africa and emerging markets. This data-driven investment model, Smart Asset Financing, finances revenue-generating assets for entrepreneurs and SMEs in emerging markets, which is funded by a USD 10.3 million USD debt and equity pre-seed round that closed in March. Using IoT from real-world assets, the model assesses the risk of investments and delivers insights to investors on investment performance to secure lucrative returns.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHT

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Threat of New Entrants

      2. 4.2.2 Bargaining Power of Buyers/Consumers

      3. 4.2.3 Bargaining Power of Suppliers

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Assessment of the Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Rapidly increasing urbanization and increasing smart city initiatives

      2. 5.1.2 Increasing proliferation of mobile and IoT devices

      3. 5.1.3 Growing need for timely decision making and rising importance of data

    2. 5.2 Market Challenges / Restrain

      1. 5.2.1 Integration complexities with legacy infrastructure

      2. 5.2.2 Lack of regulatory support

  6. 6. MARKET SEGMENTATION

    1. 6.1 Component

      1. 6.1.1 Hardware

      2. 6.1.2 Software/Platform

      3. 6.1.3 Connectivity

      4. 6.1.4 Services

    2. 6.2 Component

      1. 6.2.1 Hardware

      2. 6.2.2 Devices

      3. 6.2.3 Software and Services

      4. 6.2.4 Communication and Connectivity

    3. 6.3 End User Industry

      1. 6.3.1 Manufacturing

      2. 6.3.2 Transportation

      3. 6.3.3 Healthcare

      4. 6.3.4 Retail

      5. 6.3.5 Energy and Utilities

      6. 6.3.6 Others (Residential, BFSI, Agriculture)

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 MTN Group

      2. 7.1.2 Microsoft Corporation

      3. 7.1.3 IBM Corporation

      4. 7.1.4 Huawei Technologies

      5. 7.1.5 Vodacom Group

      6. 7.1.6 Cisco Systems

      7. 7.1.7 Google

      8. 7.1.8 Telkom SA Limited

      9. 7.1.9 Comsol

      10. 7.1.10 SAP SE

    2. *List Not Exhaustive
  8. 8. INVESTMENT ANALYSIS

  9. 9. FUTURE OF THE MARKET

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Frequently Asked Questions

The South Africa IoT Market market is studied from 2020 - 2027.

The South Africa IoT Market is growing at a CAGR of 19.12% over the next 5 years.

Microsoft Corporation, International Business Machines Corporation, Cisco Systems, Inc., Huawei Technologies, Google Inc. are the major companies operating in South Africa IoT Market.

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