JOHANNESBURG – In an industry that turns over more than R7bn annually, spaza shop township micro-entrepreneurs have a potential which cannot be ignored. Emerging as micro-convenience stores during apartheid there are now an estimated 10 000 spaza-shops spread across South Africa according to the South African Cities Studies conference paper published in 2011.
The Absa SME Index indicates that business ownership is on the rise but a majority of businesses in South Africa, two thirds, employ only one person. On average spaza shops employ between one and four people. The potential for sustainable job creation is evident. However, spaza shops exist in the informal economy meaning they exist outside of the institutional and regulatory frameworks.
Spaza shops range from survivalist endeavours to complete mini-supermarkets. Christo Botes, executive director at Business Partners says that the challenge with survivalist entrepreneurs is that they have no vision and often do not have the skills or training to move their business to the next level.
This is the current challenge being faced by local spaza shop owners in townships who are being forced to close down or are bought out by foreign spaza shop owners. The different approach to business adopted by foreign spaza shop owners has allowed them to compete against local spaza shops.