1. The landscape of the South
African Spaza environment
Spaza shops are small grocery shops, or convenience stores
(micro-enterprises in townships). The name spaza is derived
from the township slang meaning “imitation of a real shop”.
Traditionally, spaza shops have played an important role as
retailers of household grocery items in townships. Basic goods
like milk, drinks, cigarettes and bread are typically sold.
Spazas have provided the basic business foundation for
generations of South Africans, whilst bringing in additional
income to families. The survival of spazas is critical to the
fabric of the townships because so many of the owners are
women.
• More than 100 000 enterprises
• Collective annual turnover of R7 billion (in 2013).
• Approximately one spaza shop for every 86 households
(Sustainable Livelihoods Foundation)
Supplier challenges in
the Spaza market
Challenges
Challenge Root Causes Consequence to Spaza Shop
Business
Knowledge
Lack of educational
opportunities
Expensive skills training
programmes
Apprehensive business strategy
Lose money needlessly
Networking
Purchasing
Power
Low bargaining power as a
single spaza shop
Receive no discounts from
suppliers
Charge higher prices
Distribution
System
High crime rate
Transient nature of spaza
shops
Poor market visibility
Lost of time and money
More vulnerable to crime
Inferior access to goods
Crime Cash industry
Targets for crime
Shop owners feel less secure
Credit Banks nervous providing
credit
High loan costs
Deters owners from investing and
expanding their spaza shops
Health No backups if owners fall ill Spaza inconsistently maintained
during illness
Gender Gender stereotypes Targeted for theft
Inferior networking opportunities
Strengthening Spaza Shops in MonwabisCash industry
Park, Cape Town
An Interactive Qualifying Project submitted to the faculty of Worcester Polytechnic Institute for the
Degree of Bachelor of Science
Submitted by: Likuvi Chebelyon-Dalizu Zack Garbowitz Alexandra Hause Devin Thomas
Value Proposition (Addressing
inefficient retail infrastructure in
townships)
Advantages and
disadvantages of
buying from Spaza
Shops
Cons
Expensive and
unstable prices
Poor customer
services
Buying on credit
Stale and poor
quality products
Pros
Long and flexible
business hours
Walking distance
from peoples
homes
Emergency
consumer needs
Poor variety of
products
Database of all South
African spazas
Enhanced
distribution channels
Increased revenues
Access to
distribution
channels
Bulk buying at
discounted rates
Increased
buying power &
Competitive
advantage
Optimise
business
efficiencies
Improved cash
management
Reduced costs,
& overheads
Product
availability
Guaranteed
prices
Achieve
economies of
Scale
Suppliers
Co-operatives
Range of branded
products (limited
distribution
of KVI's)
Discounts are
not passed on
to the consumer
(RSP's are very
high)
Cash management/
collection/payment
Speed to shelf on
innovation is very poor.
Traders will only start
buying innovative
products 6 months after
launch
Supplier
Challenges
Advantages & Disadvantages
Challenges

2. • Training:
• Accredited business courses at
recognised business schools
(Wits Business School, Milpark)
• Entrepreneurship, finance for
small businesses, marketing,
advertising, strategy, customer
centricity)
• Partner with suppliers (product
& service knowledge) & point
of sales training
• More knowledge of product =
increased sales
Service offering
• Technology training is
provided by Microsoft to
co-operative
representatives
• ERP and CRM resides with
co-operatives
• Service offering is
powered by technology:
• On a Microsoft Platform
(Azure)
• On a Window’s server
• On a Microsoft SPLA (Service
Provider Licence
Agreement)
Key Elements of the CRM & ERP
systems
Key
Elements
Key elements
of the CRM
and ERP
system
The system is
able to integrate
with the suppliers
system /
platform
Ability to
reference
stock
Customer
profiling
Supplier
profiling
Snapshop of
business
performance
Ask Joe Spaza
Adrian Maloney
BluwinMobi
078 353 2999
bluwinmobi@gmail.com
joespaza@gmail.com
www.joespaza.wozaonline.co.za
Contact details