South Africa’s total employment through the informal economy otherwise referred to as the ‘township economy’ is 17%. In a country that has a significantly high unemployment rate, the informal sector can be a lifeline to families who lack formal employment.
Two major ways in which informal businesses contribute to the economy are by generating employment opportunities and supporting local economic development through stimulating activity, promoting investment, and attracting resources to previously marginalized areas.
According to Roger Wilco’s 2022 Township CX Report, the vibrant, culture-rich township economy that represents billions of rands in spending power is largely untapped. The total market value of the township economy is estimated to be R900 billion with approximately 60% of the market considered formal and 40% informal.
Spaza shops annually receive estimated spending of approximately R150 billion in cash, contributing 5.2% to South Africa’s GDP and employing 2.6 million people. Technology has the potential to accelerate these numbers to new heights and may provide opportunities for formal and informal businesses to trade beyond the limits of the township.
With a global movement towards e-commerce, fintech, and mobile applications can complement and increase growth for this sector.
These 5 mobile apps complement township businesses, benefiting traders:
- Kasi Eats: Launched in 2017, this 2015-developed app assists township restaurants in marketing menus and handling food delivery, akin to larger delivery platforms.
- Vuleka: The app that was founded by Makwaiba and Oscar Monama has transformed the way that spaza shops buy stock from suppliers by helping them to make bulk purchases. It is fundamentally structured to support an entire trading ecosystem within the informal sector. The platform connects small manufacturers and large wholesalers to spaza shop owners via their platform. In 2018 the app won the the Township Entrepreneurship Awards as a the best contender in the retail and finance category. The app also takes responsibility for the collection of goods from maturers and wholesalers and the delivery of those goods to shop owners.
3. Khwela: Recently the taxi industry is picking up speed in adapting to technological advancements. The Khwela app has contributed to making the taxi industry more relevant and user-friendly by providing customers with important information regarding fares and routes. The platform also provides an in-app forum that allows commuters to voice their concerns, and receive feedback and important updates that may affect them.
4. Explore Ikasi: The mobile app that is available for download on Android and iOS provides a platform for township vendors to market and showcase their business and services to potential customers who can also browse on the platform. Businesses showcased include products and services like beauty care, motor care, accommodation, education, healthcare and entertainment. The app has over 300 local businesses listed, located in different townships.
5. Stokvella: This app is an online stokvel platform that simplifies, administration, monthly payments, and claims for stokvel clubs. The app also has a simply and easy calculator integrated, to help savers realize their savings goals. Currently, the platform has more than 3,000 users which testify to its effectiveness.