South Africa: Getting Insights into the Hosting Market

Hostafrica has been operating for six years in South Africa and is hailed as a truly South African hosting company. Last year, they expanded their operations beyond South Africa into Nigeria with the introduction of Domain King. They have also launched a presence in Kenya. Their strategy is to consolidate businesses across Africa and become a genuinely African hosting company in the future.

South Africa and Hosting Market

South Africa in Numbers

South Africa is the largest domain market in Africa. The local South African domain is .co.za, with approximately 1.3 million registered domains. When comparing South Africa to Nigeria, which has a population of 200 million, only 10% of inhabitants have registered domains, whereas in South Africa, with a population of 60 million, the registration rate is higher.

The domain penetration in South Africa is the highest in Africa, and it surpasses the combined European market of more than 10 countries. South Africa serves as the industrial hub for most of Africa, particularly in the southern part of the continent.

Price and quality

The average hosting package price is $5 which is similar to European. In South Africa, people are also looking for quality hosting. Hostafrica is support centric company providing 24/7 support and strong virtual service. Such service is especially significant for sophisticated clients that require tons of uptime. In addition to this, in South Africa are 12 or 13 official languages, but the common language is English.

Payment methods in Africa

Different payment gateways are popular in African countries. In South Africa, the PayFast payment gateway is the most used, especially by big shopping companies and online or on-site shops. In the rest of Africa, Flutterwave is an extremely popular payment gateway. It is quite convenient as there aren't too many payment providers in Africa. PayPal is also used, but not as extensively as in the US. On the other hand, in Kenya, credit cards are not well-known. An interesting aspect is that, for example, in Kenya, about 95% of mobile payments are made through M-Pesa.

Africa is number one in the usage of the mobile money payment method in the world, while in Europe, this payment method is not that popular yet. In many African countries, people can take a phone and send money to each other, which is technically impossible to do in Europe.

The presence of big global brands is not strong in South Africa. Local players dominate the market. Global brands face difficulties because local brands, including Hostafrica, have a niche.

Migration is Future

Shopify offers almost similar features to Site.pro, with good UX/UI. But when someone asks about the future, Michael says that for him, the next step is ease of use. Even sophisticated customers need hosting services: Facebook, professional websites, or email. That's where we have to focus. I don't know what products will be created, but if they are easy to use, they will be successful in South Africa or elsewhere in the global world.

Migration is key. Hosting companies do not want to be locked out by technologies as they change rapidly. Hosting companies must be flexible, and an open platform provides such flexibility. For instance, if the business becomes costlier and there is a need for moving out, an open platform provides such an opportunity.

In Africa, there are many struggling small hosting companies. Michael says he had a company selling cloud computer capacities, but it simply didn't work. So, the biggest failure turned out to be the biggest win.

Filip shared how Site.pro is trying to create new templates and focuses on usability and conversions rather than beauty. Filip talked about two products. One of them works just on marketing through SEO, while the other has SEO as a weak point. Both products are from the same company, and they are really good at SEO, understanding how it works perfectly.

Sometimes, one product ranks in all the top 8 Google positions out of the top 10, but the other product is not doing well. The reason is associated with a .pro domain, as .com is better. They always make so many changes. For example, they are currently creating short videos for all components, which they then integrate into the product. This way, they can provide for their customers. They will also write a short article about every video. That's how they aim not to land on YouTube but on the website.

Michael said they are also trying to be the best in SEO because being strong in organic traffic makes big changes. They are investing a lot because it is the best combination of all small companies. Usually, small companies don't invest in SEO, but it is a big mistake. One product with good SEO can take the whole market. It makes a difference in a few years. Organic traffic is important. That's why they are writing articles in an old-school style. Sometimes, it's unbelievable that an article gets such a huge number of clicks.

Partnership

Hostafrica is offering a partnership to help organise the market for smaller companies. According to Michael, being a partner is much more valuable than being a competitor. They have contacted 100 companies in Africa to find out if they would like to collaborate, what plans they have, who their target market is, as for small companies, it is tough, and a strong partner would be beneficial.

Africa's diversity is its greatest resource and challenge. For example, Europe has the biggest centre; it is Germany or the Netherlands. Africa doesn't have a similar centre. Of course, in Africa, it is a bit more difficult to create that. It means you must have a few centres of the company, one in the South, the other in the East. Africa, for better connection and services, requires many data centres.

In the case of the North part of Africa, it is more difficult due to the language barrier. If they have business, it would be more difficult to operate due to the support service language and cultural differences. The rest of Africa has many similarities because of the colonisation that has created a similar culture. On the other hand, English is the business language here.

Final Thoughts

Both speakers have discussed their experiences while working in two different parts of the world. During the discussion, they shared beneficial tips, and we got to know that there is enormous potential for companies to grow in the developing South African market. With time, it will reach new levels. We hope you enjoyed reading this article!