Home News Calls for Young South Africans to Reinvest in Spaza Shops

Calls for Young South Africans to Reinvest in Spaza Shops

by Thaabit Kamaar

South Africa – The spaza shop industry has become highly profitable in townships. With thousands of spaza shops nationwide, these small retail businesses collectively form a market valued at tens of billions, if not more.

If so, why aren’t local and young South Africans reaping the benefits of this opportunity and actively participating in it?

Neo Letswalo, a PhD candidate at the University of Johannesburg who authored a book covering various topics related to the township economy, provided insight into the absence of young South Africans in this sector.

He highlighted that while spaza shops are crucial in sustaining township livelihoods and the economy, young people overlook them in favour of more sophisticated industries.

“The spaza shop sector has a lot of money. For instance, the township economy as a whole is actually valued at R900 billion. So, you can imagine how lucrative it is … When we were conducting research, we found that one shop would make about R1,500 to R2,000 a day after seeing about 150 customers.”

It’s important to note that the spaza shop industry has seen diverse participation, including from foreign nationals. This has contributed to the industry’s growth and diversity, without necessarily implying that they took jobs from South Africans.

Letswalo identified several factors that created a gap in the spaza shop industry, leading to a decline in local ownership. He explained that political changes after 1994 prompted many South Africans to pursue corporate employment and opportunities rather than running small businesses.

As a result, people ended up selling their businesses, giving away their infrastructure because they could no longer sustain it, or leasing it to foreign nationals.

“It is not necessarily an issue to say that they took the spaza shop, but we gave it away. Because young people would rather work in Sandton and not necessarily work in a spaza shop.”

Additionally, Letswalo emphasised that challenges of passing down business knowledge and entrepreneurial skills across generations, further contributed to the decline in local business ownership and involvement in the sector.

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Young South Africans Can Still Participate in The Spaza Industry

Despite the sector’s challenges, changes, and competition, spaza shops still present a promising opportunity for young South Africans. Beyond financial stability, the industry offers a platform for personal growth, skill development, and community engagement, addressing unemployment in a meaningful way.

While the country faces multiple social issues, including crime, unemployment, and poverty, Letswalo remains hopeful about the potential benefits of spaza shops for South Africans and local businesses.

He emphasised that many people fail to recognise the wealth, resources, and opportunities available within townships. If large corporations can see and capitalise on this, so should we.

“We don’t understand the economy because if you look at Shoprite, it became a multibillion-rand company when it moved to the township. Many companies are actually following suit. They are infiltrating the market of townships because they know a lot of people in the township have money.”

Despite appearing saturated, Letswalo believes there is still space for young people to engage meaningfully in the market. They must commit themselves to understanding the township economy’s intricacies and market dynamics, a challenge that can be overcome with determination and optimism.

“The only way that we can participate meaningfully is if we leave this whole thing of dependency and try to take responsibility in establishing [local businesses].”

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