These two words spurred on Soweto-born ceo and founder Miles Khubeka, 37, to start Gcwalisa, a company that is changing the face of retail in the townships.
“I wanted to reduce single use plastic in my neighbourhood and pondered what to do about it.
“I decided the best solution was an outlet that provides low-income communities the opportunity to purchase staple household food items at variable quantities, using their own refill dispenser to suit their budget,” explains Khubeka, who opened his first outlet in Alexandra, Gauteng.
Many informal areas in South Africa, he says, are drowning in waste because of a lack of waste collection services, and added to that the formal retail businesses in the areas were not geared to the needs low-income earners.
Khubeka decided to tackle this challenge through the launch of his first grocery refill dispensary outlet.
Here he tells us about his journey as an entrepreneur and how he did it.
Q Can you elaborate on how your idea became reality?
I had spent quite some time in the food industry, in several capacities, and so had the opportunity to experience its ins and outs first-hand.
Covid-19 and the subsequent lock downs were a particularly eye-opening experience of the realities faced by low-income consumers.
Many people say that low-income consumers are poor. I am of the belief that they are just poorly paid.
Poorly paid consumers dedicate a significant proportion of total spending to buying food.
These households are most at risk when household income drops suddenly, or food prices increase unexpectedly.
Added to that, many live in homes which do not allow them to purchase large quantities of food, hence the success of spaza shops in these areas. Lastly, the traditional retail model is not designed in favour of these consumers meaning they have to bear the brunt of high food prices.
On the other hand, I was exposed to the refill business model on several occasions, these were mainly targeted at middle- to high-income consumers. I also recall as young boy being exposed to a similar model. On several occasions my mom would send me to the shops to buy variable food items such as tea and sugar.
I am a solutions driven person. Given the above mentioned experiences, I saw Gcwalisa as an opportunity to not only serve low-income consumers but to also disrupt the traditional retail business model that does not work in the favour of these consumers.
Q How did you raise funds? Was the start-up capital a challenge to accumulate?
A We were fortunate enough to be one of the finalists of the SAB Social Innovation Awards where I was awarded R500 000 to invest in my business. I was also assigned a mentor to guide me on my entrepreneurial journey and share valuable business skills.
We also have amazing business partners. Although competing for start-up funding can be a challenge, having a clear mission, vision and an agile mindset makes the process easier.
I also can’t stress enough about the importance of receiving start-up capital from organisations who understand and fully support your vision and mission.
And having a mentor is essential. Being an entrepreneur is a lonely business.
Q How would you define success?
A Success for Gcwalisa is a democratised food system where low-income consumers across the country have access to nutritional food items at an affordable price.
Q What advice would you give entrepreneur's just starting out?
A Just start. If you see a pressing problem in your community that needs to be solved just start. My mom always uses the following analogy: “When you are stuck on the side of the road, someone is most likely to stop and assist not when you are flagging cars down but actually pushing the car.” The same goes with entrepreneurship, support is most likely to come when you start with something. Don’t worry too much about perfection.
Q Can you deep dive further into you business?
A We aim to have a direct link that connects the consumer and the producer.
We purchase the products directly from the manufacturer, so consumers have the opportunity to purchase more affordable household items. Our business model enables brands to supply the informal market in bulk using a branded refill dispenser. Customers can then purchase their groceries in micro-sizes.
Q How did you approach marketing?
A Gcwalisa is run by community leaders, specifically women who run community-based organisations (CBOs). One reason for working with these CBOs is the high level of trust that their communities have in them. We equate this to the level of trust that communities have in traditional mom-and-pop stores.
The community feels a sense of ownership towards Gcwalisa. This in itself is also a marketing strategy. Having trusted community members selling these products leads to word of mouth. Word of mouth is the best kind of marketing in townships and this has been the case with Gcwalisa. The fact that it is associated with a respected community member and is a fairly innovative concept gets people talking and buying.
Q Who is your inspiration?
A My mother is definitely my biggest inspiration. My mother is super proud and pushes me to do better every day. She is an exceptional woman who has been able to achieve exceptional feats, despite the cards she was dealt. She is the perfect example of what one can achieve when you believe that impossible is in fact possible.
Q How has the uptake been?
A Gcwalisa was launched on Freedom Day, 27 April, because our mission to democratise the food system in South Africa. The uptake has been amazing with many consumers feeling both a sense of nostalgia on the ‘scala’ (township lingo for weigh and pay) model and a sense that they’re daily needs are understood.
It is fascinating when you interact with customers and assumptions on the model are confirmed. One gentleman related to me that he is unemployed and works piece jobs, which means he is unable to buy large quantities of foods.
It is also amazing to see how customers lean towards buying healthier food items. It brings into question how people eat what they have at their disposal. When streets in townships are littered with spaza shops with a large offering of unhealthy snacks then that is what they will eat. There is definitely a demand for the Gcwalisa retail model in townships.
Q Why your interest in the green economy?
A With the recent floods in KZN, we are now seeing the real effects of climate change in South Africa. Unfortunately, the ones who suffer the most are the poorest communities. I spent time in KZN assisting with flood relief and witnessed the dire consequences first-hand. The green economy is no-longer a fad or nice to have, but something every business must integrate in their model.