South African manufacturers are missing out on millions of rands in potential sales because they don’t fully understand township retail market dynamics especially at Christmas, Selpal, owner of South Africa’s biggest online platform for spaza shop owners, says.
“For example buying in bulk is a reality during the festive season, as families are on holiday and hosting bigger numbers than usual, but ferrying the goods is a challenge. If this consumer were offered specials on bulk, specials they would buy from their usual spazas and save on transport while eschewing the inconvenience of using taxis with a big shopping load,” says Stephen Goldberg, Selpal Chief Executive Officer.
He said the Christmas dynamics were important for manufacturers to understand the value for customers, adding the period offered convergence of volume and price and so even the spaza shop owners need pack sizes that are not traditional.
Selpal gathers data on township consumers and spaza shop owners through the year which gives it a unique insight into buying choices and patterns of township merchants and consumers, a segment estimated by the government to be worth billions of rand.
Manufacturers should be bulking up everything from staples like mealie-meal to fish and beans, flour and oils, says Goldberg who estimates there may be as many as 350,000 spaza shops throughout the country.
Stokvels, which collectively control about R25 billion rand, are another important market for manufacturers at this time of the year, Goldberg says. Researchers African Response says there are 8.6 million stokvel members, with about 20 percent of them belonging to grocery stokvels which buy in bulk at the end of the year.
Through its Dollas loyalty programme, Selpal also enables some of the most under-served consumers to save for the post December season. The programme auto automatically tops up consumers’ wallets with credit whenever they buy everyday products. Selpal also gives them access to prepaid airtime for all networks, prepaid electricity, DSTV bill payments, and gaming among others.
“What we are offering is platform that facilitates and enables online ordering and cashless payments and an understanding of the trading data at every layer of the township supply chain and that has huge value for the manufacturers,’’ adds Goldberg