Stokvels in SA: A historical context
“Stokvel” is a South African generic term used to describe a group of people who have come together to contribute money towards a common identified purpose by the group members, for the benefit of the said group. The mineral revolution in the 19th Century in South Africa set in motion a change in the basic economic, legal, demographic and political forces that have governed South Africa’s development ever since. 

The scramble for Africa led by various imperial forces put in motion the movement of large groups of Black labour to mines, away from their agricultural existence. Structural changes and economic growth led the leadership of the time, to restrict Black migrant labour through the use of various laws and labour systems to limit their economic growth in favour of minority white workers economic growth. As segregation became increasingly legalised, laws such as the Usury Act (1968) emerged and actively excluded black South Africans from financial asset ownership.

The increase of urbanisation of Africans also meant a loss of sources of subsistence such as land and cattle. With over 2 million migrating to the urban system and became increasingly skilled through their mining and city jobs, an unprecedented rise in consciousness was experienced. Increasingly, Africans became aware of how apartheid was systematically excluding them – especially in finance. However, the managerial and planning skills of women were not lost. Traditionally, women bear the burden of taking care of the household. It therefore was not a surprise that stokvels were started by women in urban life. Women began to leverage off their kinship networks for survival.

The values and principles of the traditional practice of “letsema / ilima” (African concept of communal living & leveraging of resources) were brought along into urban settings and transformed to meet people’s new and urban lifestyles. It is based on these principles that the money-based stokvels came into existence and thrived into the modern days.
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There are a high number of individuals living below the poverty line and estimated to be approximately 12 million individuals (StatsSA). The likelihood that most will be females shows that there is a continuity, from a demographic perspective, between pre- and post-apartheid South Africa concerning income levels across genders. As a result, stokvels are largely female (64%) and women have used them to manage incomes and the livelihoods of their households.

Whilst it might be understood why stokvels were utilised in apartheid South Africa, an interesting question still remains as to why the need for group savings still exists, grows and flourishes in the current context of a post-apartheid South Africa.

Through monies pooled by stokvel members, a large number of people have been enabled to save up to purchase commodities such as cars, home appliances or furniture, also improvements to homes go on holidays, pay off home bonds, etc – all which as individuals they could not have been able to achieve or could have taken much longer to do so. Over time, stokvels have grown in numbers,
 sophistication and there has been creativity in terms of the various benefits derived by members.  There are various types of stokvels which exist and these are borne out of a need identified by the members to make a positive difference in their lives. It is also common for an individual to be a member of more than one Stokvel at a time.

Stokvel DNA Insights & Research
Over the years, various businesses e.g. wholesale retailers, financial institutions, FMCG companies have noted the significance of stokvels’ buying power and potential and have sought ways of harnessing this lucrative market.

Stokvel DNA is borne out of a partnership between three entities, viz CNZ Research, Mictert Marketing Research and Brand Support Keys (BSK). Stokvel DNA has become an authority in digging and unearthing insights into the stokvels market and the opportunities they present to brands. The company has its pulse on the market and fully understands the details of operations of stokvels of various types.

The bulk grocery buying stokvels
Stokvels where savings are used to buy bulk-groceries at the end of the year & equally shared among members. This is the second largest stokvel segment, after burial stokvels. For grocery stokvels, brands play an important role as they inform the group, as key decisions makers, about the product(s) the stokvel intends to purchase. Most stokvel are highly conscious and cautious about brand decisions made. 

Ultimately, for members of the grocery stokvel, brands relay important information to them as consumers. Members of grocery stokvels engage with each other and brands in complex ways: collective thinking and behaviour influences relationships that members have with each other and brands. As a result of this, grocery stokvel members are not passively influenced by brand strategies employed by brand owners but instead are active, decision-making consumers of brands.
Clearly, it is important for brand managers to understand how consumers’ minds work, particularly in a group setting. This type of knowledge will influence how brand strategies are developed in the future to target the grocery stokvel market.

Stokvel DNA’s annual bulk grocery stokvel research, with a total of 510 respondents interviewed from the provinces of: KwaZulu Natal, Gauteng, Eastern Cape, Western Cape and Limpopo. The study is titled: ”What was bought?” and provides insights into the key elements of grocery stokvel groups including: member demographics, the composition / profiles of the stokvels, stokvels’ financial behaviours (monthly contributions, utilization of financial services), brand decision making processes, groceries purchasing & in-store behaviours; etc. The study includes the details of brands bought across categories: dry groceries, sauces, canned food, hot & cold beverages, laundry care, personal care, as well as usage of electronics and social media.

The study highlights opportunities for brand owners and marketers to access and build brand relationships and loyalty with the grocery stokvels market. Also. that there is a four-step bulk grocery purchase process that grocery stokvels follow each year, presenting an opportunity for marketers to engage with stokvels throughout the year to enhance opportunities to be included in the stokvels’ shopping trolleys, come the next bulk buying season.