Shopping mall boom in townships is forcing street vendors to devise new ways of doing business

Zweli Mokgata

Zweli Mokgata

South Africa's township spaza shops are having to find new and innovative ways of surviving in the face of mushrooming shopping complexes in these areas. One such initiative, launched yesterday by Soweto wholesaler Jabulani Wholefoods, is aimed at making micro-retailers and home-based enterprises more competitive.

"Our focus is on spaza shops, street vendors and general dealers in the township who spend about R200 to R400 every day," said Jabulani Wholefoods owner Shadrack Mashele.

"These businesses are dying slowly and no one is there to support them."

The initiative is known as Club 10 and offers free membership where members will be given discounted prices on all goods. They will also be entitled to customised pamphlets that will be printed free of charge.

"We expect to get about 100 members to begin with, but more when people start hearing about it," Mashele said.

"We want to make them competitive so they can afford to pay other expenses. We will generally be giving them a 2 to 3percent discount on all goods."

Earlier this month a University of South Africa (Unisa) study revealed that the opening of a mall in Soshanguve, just outside Pretoria, had resulted in a 75percent decline in profits for small businesses situated 1km away from the mall and a drop in revenue for a third of shops located between 4 and 5km away.

Limpopo Economic Development Enterprise (Limdev) research analyst Bethuel Mulaudzi said that black businesses had more difficulty surviving, mostly because of a lack of entrepreneurial skills.

"It's true that the right supplier helps in keeping prices down and remaining ahead of customer's expectations," Mulaudzi said.

"But most of the time these businesses are failing because people [are] not understanding the business skills specific to their business.

"For instance, a butcher might not understand what is expected of him by the industry," said Mulaudzi.

"It is the same for retail. You need to know what is happening in the business locally and abroad. It helps to get together with people in the industry and others in support industries [such as suppliers] who can share information with you.

"The Club 10 project is aimed at improving circulation of money within the township," Mashele said.

"We've been open for only three months, but we are the first wholesale store in Soweto. We hope that we can close the gap and ensure the growth of small businesses in the townships."