MEDIA LANDSCAPE

Study shows online shopping revolution in SA’s townships

Consumers place high value on brand trust and authenticity, while businesses must tailor products and messages for this unique retail ecosystem.

IN SOUTH AFRICA’S SPRAWLING, densely populated and typically vibrant townships, consumers have been turning to online shopping in surprisingly high numbers, a study published in June 2022 found. Last year, the percentage of people who purchased online stood at 28 percent – this year it is at 70 percent.

The information is contained in the 2022 South African Township Consumers place high Customer Experience (CX) Report, value on brand trust released by digital marketing agency and authenticity, while Rogerwilco and research company businesses must tailor Survey54. Their report analysed products and messages for this unique retail ecosystem. the saving, spending and shopping behaviour of over 1 400 township residents across the country.

“Township e-commerce usage has grown exponentially,” said Survey54 CEO, Stephan Eyeson, during a virtual launch of the report.

“Take-outs and food delivery are popular choices. Many [people] still complain there is limited delivery in townships; companies mentioned this is due to [low] demand. We are aiming to see much more growth in the next year.”

Added the report: “This year, 70% of our audience are making purchases online. The younger the audience, the higher the propensity is for online purchases.

LOCAL BUSINESSES NOW SERVE THE UNDERSERVED

“Spaza shops (an informal convenience shop typically run from home), 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 retail insights: l 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. l New delivery services are springing up around traditional township food. l Cash remains king in these townships, 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, the researchers said.

l For grocery shopping, convenience is key. Transport costs and proximity to

South African Social Security Agency offices (where social grant payments are made) make large supermarkets a strategic monthly venture, while spaza shops are used for daily items. l Township retail loyalty programmes remain an untapped opportunity. l Word of mouth remains the most trusted recommendation source for purchases, while social media, particularly Facebook and

WhatsApp, has overtaken TV. Trust in influencers and community leaders has declined substantially.

Noted 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.”

SECOND STUDY ECHOES FINDINGS OF THE FIRST

Meanwhile, in another township-focused study published in August by research company Ask Afrika – the annual Kasi Star Brands benchmarking survey – the researchers noted that (similar to the Rogerwilco and Survey54 report) common themes which emerged were the need for trust and purpose, the requirement for a brand to do/ stand for ‘good’, and the importance of convenience and emotional connections.

The researchers also commented that another interesting theme to gain traction among township shoppers is the importance of local brands.

“Interestingly, lower income consumers regard corporate social responsibility as twice as significant compared to other income segments and [this is] a critical area for improved perceptions on ethics, trust and reputation,” the survey noted.

“Looking at the differences that exist, both demographically and in terms of attitudes, not all township consumers are the same.

“For example, Alexandra (a township close to Sandton in Gauteng province) residents are interested in financial services advertising and don’t like the idea of being in debt. Umlazi (a township close to Durban in KwaZuluNatal) residents say they are more aware of their personal finances than they used to be, and like to pay cash for everything they buy. Soweto (a township near Johannesburg) residents consider themselves good at managing money.”

Explained Ask Afrika’s executive, Maria Petousis: “What this year’s benchmark study reveals is that different communities have developed unique personalities. The key take-out for marketers is that they need to walk in the shoes of the ‘kasi’ (meaning ‘township’ in local slang) consumer to better understand them.

“To succeed with township consumers requires more granular messaging which sends the right message to a defined audience, on the right medium and at the right time, if they plan to succeed with this consumer sector.”

Township consumers in South Africa represent an important market for brands given that 50% of the country’s urban population live in townships or informal settlements. This large and diverse informal economy has often proved to be more buoyant than the formal economy.