Clicks launches KwaMakhi format to compete with spaza shops in South Africa
In South Africa, the Clicks Group has launched a new KwaMakhi retail format for townships. As the columnist notes, Clicks Group CEO Bertina Engelbrecht said during the format’s presentation that the company would compete with all spaza shops and spaza retailers.
In a TimesLIVE column, Lebo Madiba writes that KwaMakhi uses the image of a store close to the community. In her view, a major corporation’s entry into this market could increase pressure on small traders in townships.
Township economy
According to data cited in the column from the first report by South Africa’s Competition Commission on the rural and township economy, only 6% of township businesses sell through retailers. A Standard Bank study cited by the author found that about 80% of such businesses are unregistered, while fewer than 10% of them had received bank credit.
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Large companies are seeking to attract a share of approximately 900 billion rand in spending in townships, Madiba notes. She points out that Clicks, as a company listed on the Johannesburg Stock Exchange, has access to institutional capital, large-scale procurement, developed distribution and private labels.
Participation of local business
The author notes that Boxer and Usave already use similar models. In her view, the expansion of large retail chains should be assessed not only by revenue and jobs created, but also by whether township entrepreneurs gain access to supply, skills and capital.
Competition Commissioner Doris Tshepe, as quoted in the column, stressed that inequality declines when township residents meaningfully participate in the local economy rather than merely spend money there. Edge Growth Ventures CEO Janice Johnston, as cited by Madiba, links procurement from local suppliers to employment, tax revenues and retaining economic activity in communities.
