The South African Courier, Express and Parcel Services: A shining star of the e-commerce industry

The digital marketplace driving courier services in South Africa

E-commerce growth, mobile technology and changing buying patterns have powered South Africa’s Courier, Express and Parcel (CEP) Services industry turning it into a critical link in the digital economy. It might not be on the same scale as the trailblazing AI and chipmakers in recent times, but these new developments have created a business environment favouring the CEP sector.

The familiar sight of motorcycles in the 80s and 90s, mostly used for delivery “By Hand” of mail and small parcels, faded away during the first 2 decades of the 21st century but has suddenly reappeared in a much bigger wave of online purchase deliveries in the last few years.

Technology and the vast increase in communication channels have become more ubiquitous and affordable, leading to the explosion in online business dealings and increasing the frequency of now profitable low-value transactions. Visuals of colourful offerings on mobile phones, combined with the speed and convenience of home deliveries, have changed the way many people approach online business.

The umbilical cord in this value chain, from producer to end-user, is the CEP sector. It is thus no surprise that the Who Owns Whom report on Courier, Express and Parcel Services, including National Postal Services in South Africa, reports that in 2025, compared to previous years, the online retail sector grew by 35% and generated an estimated revenue of R130.0bn.

The acquisition of Pingo delivery by Shoprite, buying out RTT Logistics’ 50% stake to take full ownership to strengthen its management platform that powers its Checkers Sixty60 service, demonstrates how Shoprite, the largest retailer in South Africa by revenue and customer reach, recognises the value of e-commerce as an industry.

Same-day and on-demand delivery is becoming standard

With consumers expecting deliveries within hours rather than days, companies such as Amazon, UPS and FedEx are investing heavily in micro-fulfilment centres, small-scale, automated warehouses located near urban areas, to expedite e-commerce order processing and enhance last-mile delivery efficiency, which is the main battleground.

Amazon led the way in e-commerce by demonstrating the huge potential of online business. Being first to market, they chose to prioritise expansion and sacrificed profitability for the first seven years (1997 – 2003), becoming profitable only by 2003. Today, the company is one of the most valuable companies in the world. In the early days, Amazon used the South African Post Office for delivery in South Africa, but later it stopped due to numerous complaints about lost or undelivered parcels. The company has now established a fulfilment centre in South Africa and is using private sector CEP services.

South African Post Office’s (SAPO) decline is enabling the thriving private courier services

The private sector CEP in South Africa is not only thriving but has become technology-driven, data- intensive, customer-experience industry powered by AI and automation. Quality, reliability and cost effective CEP services are an enabling link for cross-border e-commerce platforms like Shein and Temu, making great strides in penetrating the South African market.

The bedrock of CEP services and their utilisation in South Africa is the private sector sphere rather than the state-owned SAPO, despite the latter’s well-established and physical network, due to its unreliability and low quality of service. These essential ingredients for success were completely ignored by SAPO, causing its ultimate downfall, despite the monopolistic regulatory advantages bestowed on it.

What the CEP industry teaches us about innovation and market forces

Over time, market forces become stronger and prevail over regulation. In the words of Kenneth Galbraith in his 1952 American Capitalism: “The use of power will over time create a countervailing power”.

The South African government compensates SAPO for serving unprofitable communities by granting it monopoly protection over certain postal services. This regulatory advantage positioned the organisation well to capitalise on the rapid growth of e-commerce deliveries. However, operational inefficiencies, governance failures, and persistent maladministration undermined its ability to capitalise on this opportunity.

The very thriving and profitable private sector CEP services have risen from the ashes of a dysfunctional SAPO, which for too long has relied on state bailouts, with its business rescue proposal currently requiring funding to the tune of R3.8bn of taxpayers’ limited resources to become viable, without a guarantee that it will actually work out.

The South African CEP industry illustrates how innovation and digital commerce can contribute to economic transformation. It also demonstrates the urgency of turning the public service around to serve marginalised communities profitably.