It’s safe to say that South Africa, and the world at large, is in a state of economic uncertainty, with the increasing cost of living and interest rate hikes forcing consumers to relook at how they spend and manage their lifestyles, according to Teljoy CEO Jonathan Hurvits.
The subscription-based technology and home appliance provider says that the economic uncertainty has led to the subscription model becoming more popular than ever.
“Teljoy is in a unique position to be able to provide a practical and flexible way of owning less while having more, which allows our customers to free up a valuable budget to spend on the important things,” Hurvits said.
For that reason, he said that they, too, as a company, only foresaw growth going forward.
“Quality products at good pricing underpinned by extraordinary customer service will ensure not only the sustainability of the sector but will allow it to flourish. The subscription economy is gaining traction, and we only see this increasing over time as consumer habits and needs shift to access, affordability and flexibility over traditional purchasing methods.”
Teljoy said that last year was a successful year for them as they stuck to their fundamentals, which has translated to a strong start to 2023, with some exciting initiatives to come.
It said that with the average South African coming under immense pressure from macroeconomic factors, they have had to try to navigate this as delicately as possible. “A lowlight (for Teljoy) is not being able to say “yes” to everyone who applies, but for the customers who do qualify, we are proud to be able to make a remarkable difference in the way they manage their lives. There are always going to be challenges, but our strength continues to be the ability to roll with the punches and innovate quickly.”
Hurvits said that with the prevailing rolling blackouts, with the country now at Stage 6 of the load shedding, like all businesses in SA, Teljoy was going with the flow (and spending a lot on Diesel!).
“It isn’t always easy, but we are resilient and have measures in place so that load shedding impacts our business and customers as little as possible. We try to manage customers’ expectations as best we can, given the uncertainty, which I believe we have done successfully. We continue to “watch this space” and are hopeful that we can see some radical change in the way our utility is being managed.”
In an article titled, “Done right, subscription businesses can provide consumers with value, convenience, and personalised offerings while fostering stability and growth”, published in 2021, management consulting company McKinsey & Company said it was no secret that the continued expansion of digital and the proliferation of data has fundamentally changed what it takes to compete in retail.
In response, the firm said retailers had been actively investigating ways to transform their business model, and the Covid-19 crisis has amplified that need. It added that, indeed, winning companies were investing time and resources into re-imagining their business models to unlock the power of consumer-centric, data-driven growth-which their analysis suggested was a $1.7 trillion to $3 trillion opportunity across industries.
McKinsey said that subscription businesses - in which consumers periodically pay a predetermined amount for a service or set of goods have - emerged as one way to use data to re-imagine retail businesses.
Collectively, they grew more than 300 percent from 2012 to 2018, about five times faster than revenues of S&P 500 companies then.
BUSINESS REPORT