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Five SME sectors that are booming through the pandemic [Opinion]

The pandemic has inflicted deep pain and suffering on families and friends and dragged the economy through the toughest phase in living memory. 

On 1 June 2021, Statistics SA announced that the country’s unemployment rate was at an all-time high, the news coming just two days after the country moved to level 2 lockdown to try and curb the third wave of infections. 

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Miguel Da Silva, Managing Director of Retail Capital sheds light on SME sectors that have grown during the pandemic

Yet, as difficult as it may be to contemplate, adversity can be used to drive positivity, and some industries with resilient businesses are experiencing strong growth, signalling hope for the country’s long-term prospects.

The small and medium enterprises (SMEs) that are thriving have used adversity to reflect, pivot, and make lasting changes that have had an impact on their bottom lines and primed them for unprecedented growth when the economy rebounds post-pandemic. Covid-19 has forced them to redesign their business models.

As a funding partner, we have visibility of the performance of SMEs in almost all sectors, and as such, we pick up on trends very quickly. This extends beyond spikes and dips in businesses taking out funding but includes actual business activity and revenue trends. The findings are exciting because they provide the template of success and offer a hint at which traits will likely see businesses thrive post-pandemic.

The biggest change since the pandemic reached our shores has been restricted movement – first, consumers were forced to stay home and now many choose to stay home where possible. Businesses that didn’t make a plan to go and find customers suffered the most, while many of those that were creative found more customers – in their homes – than ever before.

In all instances, the SMEs – across sectors – that are experiencing strong growth used technology to its fullest potential. This goes well beyond setting up eCommerce stores and includes using online tutorials, masterclasses, and “virtual try-ons” to drive sales of their products. They have tapped into a demand for DIY that has been accelerated during the pandemic.

House and home

The house and home sector has boomed – all SMEs in the household goods space that made digital provision for reaching their customers are growing.

Building goods and hardware is soaring – in fact, SMEs operating in this sector were up year-on-year in February this year, despite the pandemic. In both instances, SMEs have been able to reach and cater for a captive audience. Everyone is at home, and where there is pent-up buying power, we are seeing it is likely to go into home improvement.

Sports and fitness

Sports equipment and electronics sales have soared – this industry is a great example of how SMEs are creatively using a combination of online classes and tutorials to drive product sales of their merchandise.


While the food and beverage sector is still about 20% down on where it was before the pandemic, take-aways has soared about 20%. This is not just traditional takeaway restaurants, but sit-down restaurants that have spruced up their take-out offering. These businesses used technology to stay close to their patrons during the lockdowns and are now benefitting from patrons who still want great food but choose to enjoy it at home.

Niche online food ordering businesses like LiveCook have taken immersive experiences to a new level, where pre-packed ingredients are used at home as “patrons” are virtually taken through meal preparations by top chefs.

Health and beauty

This sector has been one of the hardest hit during the pandemic. However, innovative SMEs in the industry are enjoying impressive growth by shifting self-care and wellness online. Here they use masterclasses and online tutorials to promote the uptake of their products.


The traditional clothing retail sector has also felt the pain of fewer consumers going to shops. However, by making full use of eCommerce and digital marketing, many clothes retailers are booming, with online clothes sales among SMEs on our books soaring 40% during the worst of the pandemic.

Covid-19 has opened all our eyes. It opened our eyes to social behaviour, the importance of business continuity plans, the reach of digital and new ways of doing business. It forced us to think out of the box. This is a powerful learning that, if exploited, will bode well for the future.

The rapid digitisation and DIY evolution of most sectors is unlikely to be reversed when we finally get to the other side of the pandemic. Instead, we are likely to see a hybrid shopping experience. Just like the workplace, there will be a time when consumers prefer being somewhere in person, but at other times they are likely to want to make use of the incredible convenience they have now become accustomed to using. 

If they haven’t already, brands and businesses will need to pivot to cater to this new savvy consumer. Customer service and customer experience are going to play an even larger role in the future, as an angry customer will have far more options thanks to the rapid scaling of online retail. 

Many SMEs learnt that by building strong, trust-based relationships with their customers during the pandemic, they had a solid base from which to leverage technology to benefit their bottom line.

These are lessons to take into the future because when the economy rebounds, the businesses with the best relationships with their customers will likely benefit first, and the most.

The amount of time it takes to recover from the pandemic will depend on the success of the vaccination rollout, but the SME sector’s prospects are more closely tied to sentiment and confidence. 

The SMEs that thrived during the lockdowns have given everyone else the template to build confidence and improve general sentiment: adopt an opportunity mindset, rethink how you operate creatively, embrace technology as a tool to do business, and try and find in-home, value-add experiences to support your sales.

This article was written by Miguel Da Silva, MD at Retail Capital.

Featured image: Miguel Da Silva, MD at Retail Capital (Supplied)

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