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Food poisoning allegations in recent weeks have seen the South African government becoming stricter with spaza shop regulations by making interested owners register.
This is after children in South Africa died after consuming snacks allegedly bought from these spaza shops, which resulted in calls to either close the spaza shops down or restrict foreign nationals from owning and running the establishments.
A question has been posed if township economy can afford strict formalisation of the informal market?
ALSO READ: Another child dies in Soweto after eating snacks from spaza shop
Teboho Nthoana, Think Big SA Competition winner spoke about what can be done to grow the township economy.
He won the competition because of his paper, Building Sustainable Township Economies: Integrating Micro-Investment Ecosystems and Entrepreneurial Innovation.
Answering the question about formalising the informal market, he said people who would suffer the most are normal men and women selling on the streets.
He added that the government could start by looking at how this was successfully done in other countries before implementing it.
He acknowledged that the formalisation of the township economy would play a big role in unlocking inclusive economic growth. But a number of things need to be considered.
There would need to be an investment from the government into infrastructure. But the policies need to support the informal market to ensure that they thrive.
“Financial inclusion initiatives are also key,” he added.
ALSO READ: Spaza shop draft bylaws ‘anti-growth’ in an ‘overregulated’ economy – FMF
Nthoana also noted that for township economy to grow, there would need to be innovation, and some of the businesses are still doing things in the traditional way.
He said entrepreneurs need to make investments in tech, as the world is moving towards a more digital landscape.
But when it comes to the government side, he said there needs to be regulatory streamlining, as this is usually what hinders many businesses in the township from being innovative.
The 2024 Township Customer Experience (CX) Report shows that most residents use word of mouth and television as their platforms for brand discovery.
With social media taking second place with 27% of the report’s respondents.
“However, trust is fragile—41% of respondents indicated that brand inactivity on social media undermines their confidence, emphasising the importance of consistent engagement in digital spaces,” said Mongezi Mtati, Senior Brand Strategist at Rogerwilco.
ALSO READ: Gauteng’s R5m spaza shop fee declared illegal
To reach the findings, the report surveyed over 1,600 township residents across the country’s nine provinces.
Respondents indicated they have a strong affinity for local brands, with 19% of respondents attributing price as a key factor when choosing township brands.
18% of respondents highlighted the appeal of unique, locally made offerings as their key factor.
“Township consumers tend to gravitate towards brands that resonate with their daily realities and cultural identity, underscoring the importance of authenticity and community relevance in capturing township loyalty.”
Mtati said the growing presence of counterfeit goods in spaza shops has emerged as a pressing concern, which has led to lack of trust from consumers and has put people’s lives at risk.
19% of respondents believe spaza shops owners bear responsibility for product authenticity, an equal number feel this duty lies with manufacturers and brands, while 21% sees it as the government’s responsibility.
“To maintain trust and protect their customers, brands must establish strict quality control measures and collaborate with spaza shops to verify product authenticity.”
NOW READ: Are foreign-owned spaza shops vital to the township economy?
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