Townships are crucial to unlocking the South African e-commerce retail industry.

It is essential to start considering townships as a critical driver of your online store.

Should network companies reduce data prices to start unlocking and providing small businesses with access to the township market?

Probably yes – I have been considering which variant of product or service that big retailers offer that township business does not already offer – Tomi sells premium cultural wedding dresses, Ginger has a variety of braai sauces, Mam’Khulo has a bakery, Khulu makes bespoke furniture, Tladi runs a supermarket and I could go on and on. The fact is that townships have sustained small business ecosystems.

This got me thinking. If we were to list every product and service that every registered township business offers on a single database – we would have EVERYTHING.

So why should we rely on big retailers to supplement what our neighbours already offer?

Because big retailers will deliver the product to your house, they will provide customer service, after-sales support, variety, return and refund conditions, general convenience of an offer and they will offer exactly what we are looking for? Probably yes to all. But thanks to the wide availability of free digital tools – Township business can also provide that! Do you know what is even better? It is an automated process!

South Africans are steadily adopting e-commerce. According to FNB, e-commerce spend has increased by over 30% in the first half of 2020 compared to 2019. This may be a direct impact of the global pandemic. In my opinion, it is the early delivery of the changing retail landscape. By now, you have, or know someone who has shopped online at least once. The crazy thing is that, according to Business Insider, e-commerce spend only accounts for 2% of South Africa’s total retail spend. The South African e-commerce market is largely untapped. Statista market and consumer data projects at least 30 million South Africans could be converted to online shopping by 2024. Where are most of those South African consumers based? You guessed it, townships.

There is an obvious growth in eCommerce in South Africa, but it seems there is a serious lag. Despite the big growth in online retail, South Africa’s e-commerce market still lags behind the global curve. South Africa’s online spending accounts for only 2% of all retail transactions, compared to the global average of 16%. The world’s highest data costs and the unequal infrastructure is seemingly stopping South Africa’s eCommerce potential. Simply put – township consumers do not have reliable and affordable access to the internet and big retailers do not want to deliver to the township.

It is clearly up to us as the township business to unlock our own neighborhoods. It is the best time to be innovative, collaborate, and break to rebuild the barriers of entry in the township economy – driven by township businesses augmenting digitally. We already have the products, skills, a limited but abundant resource, and best of all – the critical understanding of the township consumer behaviour.

It is my challenge to all entrepreneurs today to start reconsidering and rethinking your business. Consider going digital, firstly. Lastly, consider the emerging township eCommerce market whilst we still have the great opportunity of taking advantage and molding our own eCommerce township ecosystem.

Townships are crucial to unlocking the South African e-commerce retail industry.

Happy 2021, ReThinkers.