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How to unlock opportunities in the township economy

A street vendor who sells prepaid Vodacom airtime makes a call on his cellphone in Alexandra township in Johannesburg. Photographer: Nadine Hutton/Bloomberg

A street vendor who sells prepaid Vodacom airtime makes a call on his cellphone in Alexandra township in Johannesburg. Photographer: Nadine Hutton/Bloomberg

Published Jun 18, 2022

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Estimated at $9.8 billion, South Africa’s informal retail sector represents a substantial portion of the total retail market and a third of the country’s FMCG market.

Home to millions of businesses, from entrepreneurs and micro, small and medium enterprises (MSMEs) to large wholesalers, it has historically been overlooked by the SA banking sector.

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Insights from FirstRand reveal a sizeable untapped market, with many cash-only wholesalers achieving turnovers as high as R40 million per month, and even small township shops turning over around R2 million per year.

Portfolio Director of Food, Hospitality and Trade at dmg events, Evan Schiff, agrees that the township economy is clearly a huge opportunity for both manufacturers and importers of food and FMCG goods.

This is why it plays a prominent role at leading food and beverage trade show Africa’s Big 7, taking place between 19 and 21 June 2022 at the Gallagher Convention Centre in Johannesburg.

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“Co-located with multi-sectoral trade show SAITEX, and in partnership with key stakeholders such as the Township Economy Chamber of Commerce and Industries in Africa (TECCIA), Banking Association South Africa (BASA) and SMME Chamber of Commerce, we have developed an initiative to drive development, trade and inclusive growth in Southern Africa’s townships and informal economy by providing buyers and sellers with opportunities to access the township economy through workshop content, features, speakers and exhibiting opportunities,” says Schiff.

In order for the township economy to succeed as a driver of economic development and job creation, Schiff says it is important that the challenges faced by the informal sector are collectively recognised and addressed.

Event knowledge partner Euromonitor lists the sector’s primary difficulties as: low bargaining power from suppliers due to the fragmented nature of informal trades, poor access to financial support, as well as aggressive competition due to relatively low barriers of entry.

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Over a series of free, collaborative workshops, visitors will learn valuable insights and gain a better understanding in areas such as SMME access to finance, new market opportunities, transformation for women in trade, as well as a masterclass on re-establishing one’s business.

In addition to the Township Economy workshops, Africa’s Big 7 general workshop programme will be equally packed with a vibrant mix of learning, development and in-depth industry debate from a range of leading thought leaders across the retail ready food and beverage sector.

Consultant Kiba Bam, one of Africa’s Big 7’s impressive advisory board, will be running a free workshop on what retailers want, offering latest trends and key issues impacting the sector, as well as sharing insights on the latest innovation, creativity and knowledge to drive the food and beverage community forward.

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With Dawood onboard as sponsors of registration, badge and lanyard, Schiff says the 2022 edition will no doubt be the platform to engage on topics such as redefining the food and beverage value-chain and creating affordable and accessible food in Africa.

“By visiting Africa’s Big 7, buyers will get direct access to manufacturers, opening them to new opportunities in the township economy markets, and enabling them to engage with Southern African stakeholders and grow their businesses,” concludes Schiff.

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