Vibrant SA township economy relies on trust for local businesses
By our News Team | 2022
Online shopping is rising rapidly, but big brands are not tailoring their products and messages for the unique township ecosystem.
Consumers in South Africa’s township communities are turning to online shopping in surprisingly high numbers, a new study has found. Last year, the percentage of people who purchased online stood at 28 percent – this year it is at 70 percent.
The data is contained in the 2022 South African Township Customer Experience (CX) Report, released this week by digital marketing agency Rogerwilco and research company Survey54. Their report analyses the saving, spending and shopping behaviour of over 1 400 township residents across the country.
Photo by Olga Ernst via Wikimedia Commons
“Township e-commerce usage has grown exponentially,” said Survey54 CEO, Stephan Eyeson, during a virtual launch of the latest report.
“Take-outs and food delivery are popular choices. Many still complain there is limited delivery in townships; companies mentioned this is due to demand. We are aiming to see much more growth in the next year.”
Adds the report: “This year, 70% of our audience are making purchases online. The younger the audience, the higher the propensity is for online purchases.
“Spaza shops, eateries and delivery services are capitalising on this trust, taking advantage of opportunities in communities historically underserved by large brands. For example, 29% of the respondents report having ordered online from small independent food outlets— the majority of which evolved out of the Covid crisis.”
Among the other key insights:
- South African fashion brands are increasingly seen as premium and desirable, with three-quarters of respondents choosing local over international when using their store accounts.
- New delivery services are springing up around traditional township food.
- While trust in banks has increased, they are seen as saving rather than investment vehicles.
- Fifty-eight per cent of respondents belong to at least one stokvel (informal savings club); these are diversifying beyond the traditional saving model to offer investment opportunities.
- Cash remains king, with trust in mobile payments and banks from a transactional perspective being low. Education around smartphones and mobile payments is essential to growing this market.
- For grocery shopping, convenience is key. Transport costs and proximity to South African Social Security Agency (SASSA) offices make large supermarkets a strategic monthly venture, while spaza (informal) shops are used for daily items. Township loyalty programmes remain an untapped opportunity.
- Word of mouth remains the most trusted recommendation source, while social media, particularly Facebook and WhatsApp, has overtaken TV. Trust in influencers and community leaders has declined substantially.
Note the researchers: “One message is clear from the report — brands need to recognise the importance of tailoring their products and messages for the unique ecosystem developing in townships. It is becoming increasingly clear that trust and authenticity have a high premium in this environment.”