28TH November 2019
Kasinomics and the township Entrepreneur
Today we have to thank GG Alcock the founder of Minanawe Marketing, a leading marketing agency in the mass market, who wrote a book called Kasinomics about the economics in the township sector. We asked GG about his book and township Entrepreneurs.
Where does the name Kasinomics come from?
Kasi is the cool word for the townships nowadays, so I just really created this name Kasinomics and the underlying thing is that there’s a huge revolution happening in this space. To give some examples:
Just that sector has thousands of food outlets turning over about R87 Billion a year in turnover; The Spaza sector, once seen as a little hole in the wall, now has 100 000 outlets turning over about R200 Billion a year; Traditional medicine which is very much about herbal kind of products, is worth about R18 Billion a year employing about 200 000 people.
There are also a multitude of informal businesses making very good money and employing many people, but we don’t recognise them at all in our formal business sector and in our employment figures.
Is this due to a lack of branding?
If you look at the Spaza sector, they’re selling branded goods and turning over huge amounts of money. We tend to think of these as survivalists little businesses and they may not be branded, but in the townships they become very well known. Even some hawkers can turn over up to R50 000.00 a month on their little stalls. 60 percent of all sales at the city market of vegetables are going to hawkers in the Kasi environment, but they don’t fit our formal ideas of what a business is and yet, they are very well established.
What about the informal ‘pop up’ stores business?
We often in the city see a small ‘pop-up’ store arrive at a construction site and then be gone when construction is complete. The township sector is very well-tuned to wherever people are and you’ll find that gazebo or that caravan moving from spot to spot. They can be lucrative small businesses. They offer a huge amount of convenience, products and the food styles that people are looking for. They offer things like credit with no interest on your goods available until the month end. This is the very essence of the innovative Entrepreneur!
What challenges do the informal sector face?
Security in the area they are trading and lack of finance from banks are the two biggest. The Somalis have been so successful in the Spaza sector because they generally capitalise their businesses through lending each other money. Another problem is that government doesn’t recognise these businesses as businesses. We need to change that mind-set and start looking differently at how we can support them.
What can the formal sector learn from the successes of the informal sector in South Africa and other parts of Africa?
We have to look at what is working, take those products and redesign them from the ground up to suit the specific dynamics of our informal sector and our consumer segment. We think we can just take if off the shelf and offer it. The real opportunity is creating products that are designed to fit the lifestyle, the behaviour and the needs of people at every level. When we do that there’s huge opportunities!
GG can be reached at www.ggalcock.com and the GG Alcock Kasinomic Facebook page where he posts interesting businesses in the townships.
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