Johannesburg – There are an estimated 200 000 spaza shops in South Africa.
Spaza shops contribute up to 5.2% to the country’s GDP, employing 2.6 million individuals, according to the South African Township Marketing report published in 2021 by digital marketing agency, Rogerwilco.
Spaza shops have been part and parcel of the township's economic landscape for a long as there have been townships, taking the form of house shops and growing to container stores and mini-marts. They are a big part of the business heritage of South Africa.
This is what motivated Spaza Shops Stokvel founder Mbongeni Sangweni to start his initiative, which looks to take spaza shop ownership to the next level.
“Spaza shops were started by our parents but because of the advancement of technology, the pace at which the world is moving, and a lot of improvement and innovation, it happened that our parents were unable to keep up and were subsequently left behind. So, I started this initiative to ensure that we are able to keep up with the times,” said Sangweni.
Spaza Shops Stokvel has partnered with eKasi Entrepreneurs, an organisation that invests in infrastructures and ecosystems that develop the township economy, to bring this innovative concept to fruition.
The initiative will allow individuals to own, rent and run spaza shops without being physically present.
Through the stokvel, members will have the opportunity to contribute funds towards the opening and running of a spaza shop, which will be facilitated and managed on the successful stokvel platform, Stoffella by eKasi Entrepreneurs.
One of the most important contributing factors to the success of a spaza shop is the cost of the stock and reliable suppliers.
“With all these spaza shops, we’ll be able to promote bulk buying. So we’ll be able to buy as a group, which allows us to negotiate better prices with suppliers and, therefore, improve our margins,” said Sangweni.
“We have got systems and processes that will run the businesses. The system will tell us exactly what stock is needed and at which stores. Most importantly, it will take care of the last mile issue faced by businesses as it will also facilitate deliveries.”
An important facet of the Spaza Shops Stokvel is the business ecosystem that Sangweni is looking to create. It is a value chain that will not only benefit investors but also other businesses within the communities where these spaza shops will operate.
Sangweni currently has eight spaza shops, which are run by locals and employ a total of 14 people.
“Most members of the stokvel will not be involved in the hands-on running of the stores. Remember, we rent out space in people's yards. We train the same people in those communities to manage the spazas,” he said.
“The delivery of goods to our stores also involves the locals. They use their vans, scooters and bicycles to make deliveries. We also involve local producers because these shops are owned by locals for locals. So we encourage them to list their products with us.”
Sangweni highlights the importance of building a thriving township economy.
“There’s something termed ‘circulation of the rand’. It refers to how money circulates within the community before it is taken out and into the coffers of big businesses. In most instances, money circulates once in our communities,” said Sangweni.
“Not to be critical of malls, but the money spent at malls is immediately taken out of the ecosystem,” he said.
“But when you involve township business, the money goes from Mr Mkhize to Mr Mokoena, and so on. So that money rotates at least three or four times before it is taken out of our communities.”
Sangweni also laments how imperative it is that township residents participate in the township economy.
“The bigger picture is that township residents must be participants in the township economy. We always hear figures being bandied about referring to how much the township economy contributes to the country’s GDP, but if you look at the residents of the townships, it looks like residents are just recipients of grants and charity,” Sangweni said.
“The bigger goal is to have young people, residents and the creative to be real participants of what is happening in the township. It is not just in retail that we want to see people thrive, we want to see them participate in every aspect of the township economy.”
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