Lack of township consumer info recreates apartheid

24 January 2018 - 11:38
By Stephen Goldberg
Image: Stock Photo

I contend that the lack of detailed information of South African township consumers in the democratic era is as discriminatory as the exclusion they suffered under apartheid.

Detailed empirical data for township research and marketing is virtually nonexistent, a surprising fact given that half of SA's urban market lives in these settlements that are dotted in and around the main urban centres, according to a 2014 World Bank research report.

The study found that Diepsloot, northwest of Johannesburg and home to more than 200000 people, had a R2-billion spending power that was mainly spent in the suburbs of Sandton and Fourways.

But ask any of the country's main supermarket chains or indeed the Fast moving consumer goods (FCMG) manufacturers and none of them would be able to provide a complete profile of their township customer, more than two decades after the end of apartheid economy which created these areas as pools of cheap labour.

Amid the explosion of information spawned by the internet and improved data and information collection and storage, there really should be no reason for the dearth of market information on a segment of the market that is massive and can only grow.

I strongly believe that one of the ways we can improve the lives of the millions who live in the townships and the informal settlements around the urban areas is through the transformation of the retail value chain. This is a role only the private sector can play, harnessing the power of entrepreneurship, technology and market forces to change lives.

The technology that proliferates around us and which we take for granted should be at the forefront of industry efforts to gather information on a population segment discriminated against during apartheid and which now finds itself again at the end of a long and inefficient value chain in the democratic era.

So who needs to do what?

Manufacturers need to gain a better understanding of one of their main market segments in order to increase sales just as much as the retailers need to know who is emptying their shelves of the most basic commodities in the townships.

That this information is lacking more than two decades after the dawn of democracy is a perpetuation of the economic discrimination the same group suffered under apartheid and should be inviting the same opprobrium that brought apartheid down.

Better information means improved marketing and transparency which in turn should result in efficient pricing and value for money for some of the most marginalized groups in our society.

Huge opportunities exist for growth in the informal retail sector with prospects to expand the service offering and convenience for customers to include new distribution channels for banks, insurers and other financial services providers.

The technology that can help township merchants to also buy from their suppliers and pay without using cash is available. By bringing data, transparency and efficiency to more than one level of the supply chain, it is possible to further reduce prices for township consumers and build a rich set of data throughout the supply chain. Ultimately this will allow financial service providers to bring working capital products to township merchants - bringing best practice working capital management to township retail.