The informal retail sector is a vital part of the economy of township communities throughout South Africa. From spaza shops, fast food sellers on the roadsides to sell-all kiosks providing essential goods and services, these businesses are here to stay and are integral to the lives of township dwellers, largely because so many of them continue to live far from the formal iterations of these retail outlets.
However, the entrepreneurs who own these often flourishing enterprises have for years faced a myriad challenges compared to those of their formal retail counterparts. And until solutions can be found to meet these challenges, these informal businesses will be limited in their growth in spite of the crucial role they play not only in meeting the needs of their communities, but in job creation and providing for their owners and their families.
But while they are the supply that meets local demand, the way in which they themselves obtain their own supplies has traditionally been one of the biggest obstacles to their own economic growth and sustainability, with either underdeveloped or even non-existent logistics and supply networks available to their owners.
There are companies that are starting to recognise the gap, which now provide services to areas no other distribution companies have either ever dared to or been inspired to enter.
Jessica Boonstra, originally from the Netherlands, spent years seeing how the growth of online retail drastically changed people’s lives from numerous angles, be it for the safety it offered or the convenience. She realised a similar transformation would benefit both informal traders and their customers in South African townships, largely underserved by big retailers.
As a result, in 2018, she founded Yebo Fresh to provide a solution to the challenge of logistics in townships, by setting up an ordering and distribution network that would see quality, fresh food and household goods delivered directly to the doors of families and informal businesses. Currently, the business operates in a number of townships that lie within a 40km radius of the Cape Town CBD.
Explains Boonstra: “Because of the complexities many informal retailers in townships face in obtaining stock, they can lose countless hours of their business day just trying to secure stock, with many having to travel on overcrowded public transport to go to the more formal retail centres to fill their own orders.”
Nontembeko Delo agrees with Boonstra. She owns Izibele Spaza in Site B in Khayelitsha and says one of her biggest challenges in the past has been that she had to close her store every second day so that she could leave the premises to shop for supplies. Clearly, this is not ideal: leaving the business unattended is a cost in lost business, and it leaves the premises vulnerable.
Now a Yebo Fresh customer, she not only no longer needs to leave her store in order to replenish her stock, but purely due to the logistics of what she could manage on her own versus what the company is able to deliver direct to her door, she has access to a larger range of products for her customers, delivered within 24 hours of placing her order.
It has, she says, changed her life: “Yebo Fresh has improved my ability to generate income and keep my store stocked without suffering any downtime.”
Likewise is Jane Mills, who owns Noah Spaza in Woodstock, and says that access to a reliable delivery service like Yebo Fresh that understands her needs allows her to stock fresher produce: “It also saves me time so that I can focus on my business.”
The company’s unique business model and partnerships with manufacturers allow it to deliver top quality products and A-grade brands at extremely competitive prices, from its warehouses to informal traders and even households in township areas.
“What we’ve done to assist townships is to harness technology, through the setting up a WhatsApp line, that enables township businesses to place their orders directly with us, and then have them delivered to their door by a network of local drivers who know each area very well and can navigate their way through to destinations that often don’t have formal street addresses,” explains Boonstra.
The company has also identified other challenges within the township business system, such as the inability of informal entrepreneurs to secure loans to either start or expand their businesses, or even to have their businesses recognised in the first place, all of which also have a dramatic impact on the management of their cash flow.
“We’ve seen the very big need for this in the townships,” notes Boonstra, “and we therefore in the future also aim to assist business owners with credit solutions and loyalty offers that will enable them to order product ahead of time and then pay for it at a later stage. It’s about identifying the frustrations that township businesses and their customers face, while acknowledging that these businesses are here to stay. They fill a very definite need in their communities, and they deserve solutions to ensure they thrive.”