Members of pro-Palestinian group Boycotts, Divestment and Sanctions (BDS) are campaigning against the singer's partnership with major South African retail group Woolworths, over its imports from Israel.
The South African branch of the BDS movement vowed to hold "the largest protest any artist would have faced since the end of apartheid" at Pharrell's concert at Cape Town's Grand West Casino.
On Friday the group won a court battle against an attempt by Cape Town authorities to limit the number of demonstrators to 150, and said it expected 40,000 people to turn out.
Earlier this year, Pharrell became Woolworths' new style director "in a ground-breaking collaboration across a series of sustainability-focused projects", the upmarket retailer said.
BDS accuses Woolworths of importing Israeli agricultural produce from the occupied territories, a charge the company denies.
It says less than 0.1 percent of its food products are sourced from Israel, and the imports comply fully with South African government guidelines.
Pharrell shot to stardom in 2014 with his global hit "Happy", which sparked a wave of cover videos on the Internet.
BDS said that if Pharrell wanted to make the world "happy", he should join "the growing list of artists from Stevie Wonder to Lauryn Hill, Alice Walker, Roger Waters and others who have backed the non-violent BDS movement".