The Spaza business is breaking new ground by establishing an innovative route to market for the informal retail sector. The objective is to open up this market to a broader range of suppliers not just the largest FMCG players. Historically, the informal sector has not enjoyed access to the same level of supply chain infrastructure that has characterised the formal sector. This is largely due to the fact that the informal sector is characterised by a manual, decentralised, cash-based environment which makes it more expensive to supply due to its higher distribution and cash-related costs.
SG Spaza has developed an electronic order platform using a .mobi platform to establish a cost effective supply chain for the informal sector. Suppliers will benefit through a greater route to market strategy for the informal sector with direct supply to individual Spazas and the elimination of cash handling. The direct supply of product to the Spaza enables it to act as a ‘hub and spoke wholesaler’ to the other Spaza shops in its area. This makes the Spaza concept more sustainable by opening up a greater basket of products to stock and the introduction of additional value-added services such as airtime and pre-paid electricity.
Benefits of the Spaza concept