South Africa is what experts call a “welfare state”, the amount of people living off state (read taxpayer) handouts far exceeds the working population. While South Africa does have the standard old-age and disability grants, it also pays women to lay on their backs and have children when they cannot afford to do so (“child care grant”). And it pays healthy young people to twiddle their thumbs the whole day (the chill out or “social relief distress” grant) with the end result being the highest youth unemployment rate in the world. Now most people – except the beneficiaries and George Soros funded NGO’s do not consider this to be a point of pride, in fact it is an embarrassment. But that does not mean that you can’t stand behind the cash register of South Africa’s R257 billion a year welfare experiment and collect your piece of the pie, like the Bangladeshi’s on the Cape Flats.
They way to target this market it to think in terms of categories. What category do you target: food, leisure, etc. I will be looking at two new ideas soon that is very popular with this market: township WiFi (used to sit on Twitter the whole day) and the ubiquitous liquor shop.
Category thinking
Food
We’ve spoken about non standard sized portions that can be used to offer value. We’ve spoken about small portions, unique sizes. But there are also cheaper formulations: I saw a discount store recently sell medium cream milk. Yes that’s right, they are now watering down full cream milk and selling it for R1 to R2 cheaper per liter. That’s how fucked SA is: pretty soon you’ll be lucky if you can afford watery low-fat “2% milk”.
I won’t even bother getting into surplus and salvage, it is now a standard mainstream industry, that market is so saturated even PickPay is doing it with their red labels.
Small portions
The key to success in the small portion business is to have no packaging at all. People must bring their own containers and you just sell your products out of drums.
Further Reading
Business Opportunities from South Africa’s R350 “Social Relief of Distress” grants
Sipping from the SASSA Stream – The Bangladeshi Playbook on the Cape Flats
Open a Clearance Supermarket
Start a Bargain Bin Discount Business
Start a Salvage Shop Business
Buy & Sell Distressed / Salvage Food Products
Start a “Fresh” Food Surplus Business
Start a Money Saving Business to Reduce the Cost of Living for South Africans
