by Nokuthula Ndlovu

SPAZA SHOPS FOR THE YOUTH

Retail business opportunities created for youth entrepreneurship

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Soft drink giant Coca-Cola South Africa’s biggest bottler, ABI Bottling, in conjunction with the Free State Government, recently handed over the last of the 66 spaza shops allocated to the youth of Meloding, Thabong and Kutlwanong. The ABI Bizniz In A Box spaza shops is part of ABI Bottling’s empowerment initiative to help these young entrepreneurs to become active participants in the economy.

The opening of the first ABI Bizniz In a Box spaza shops is a culmination of a recruitment process that started in July this year where almost two thousand youth responded to register for an assessment for entrepreneurship training. Sixty six youth were selected to undergo the intensive entrepreneurship boot camp training to prepare them for the business opportunities now being allocated.

Free State Premier, Ace Magashule, and ABI Managing Director, Velaphi Ratshefola, last year cut the ribbon at the first spaza shop in Kutlwanong and declared it open to trade, offering household grocery goods and soft drinks.

Selected youth received fully stocked spaza shops in containers to the value of R70 000 each—a capital investment which they’ll have to pay back.

Tsholofelo Mqhayi, Enterprise Development and Sustainability Specialist at ABI says: “The businesses are not intended to be handouts but fully fledged businesses that the participating youth will have to maintain and sustain. The investment paid back will give other youth the opportunity to benefit from this initiative as the plan is to broaden the initiative to other communities in the country.”

This youth empowerment project (YEP) is built around the pay-it-forward model. Participating youth understand the importance of further creating opportunities for their peers, and are keen to contribute a percentage of their profits towards the programme, so that more businesses and entrepreneurs could be established.

Spaza shops have for many years played an important role as retailers of household grocery items in township communities, and have also served as incubators of entrepreneurship. “This initiative will lay a good foundation for youth to get exposure to the business world and hopefully they can grow into bigger players in the industry and major contributors to our economy while creating employment opportunities,” Mqhayi adds. ABI has to date invested more than R5 million in the programme.

“We are committed to the empowerment and development of communities through partnership initiatives that support entrepreneurs and build viable and sustainable businesses. Small businesses play a critical role in growing our economy. This is why it has become mission-critical for ABI to contribute to SMME success by boosting skills and ensuring these businesses do more than survive, but thrive,” according to Mqhayi.

Talking about the main inspiration behind the YEP and how is it going to curb unemployment, she told BBQ in an exclusive interview that as retailers of household grocery items, spaza shops play an important role in township and rural communities.

“Many stock Coca-Cola products—creating a direct and important channel to one of her company’s key markets. Additionally, these micro-enterprises are a source of income for households, and can also act as important incubation spaces for entrepreneurs. In this context the project was conceptualised and developed as a means of making a meaningful and sustainable impact on youth unemployment and enterprise development. We have one of the highest youth unemployment rates in the world and, if we train and empower our youth to become successful entrepreneurs, they in turn will potentially employ people from their own communities. Therefore, the YEP could be a catalyst for a cycle of empowerment and upliftment.”

Mqhayi says the initiative is a partnership between ABI and other stakeholders including SEFA, Telkom, and various provincial and local government departments—and each partner made a contribution to ensure that they reach their collective objectives.

“Telkom for example, has committed to supporting the spazas with ICT equipment and WIFI for each entrepreneur. SEFA has also committed to providing funding towards the containers themselves. ABI is providing the entrepreneurs with ongoing business skills training which includes accounting services, branding and marketing material, as well as business development and mentorship support. We believe this collective team of partners is ideally placed to put these Bizniz in a Box entrepreneurs on a path to their future success.

“We see this project as a means of revitalising the townships in which we operate, with an additional focus on women. By piloting this project, we’re gearing for future rollouts in other areas, with a view to continuous improvement. We are very conscious of the fact that for us to succeed as a business, we need to enable our communities to succeed.

“By working with our partners and these communities to tackle the challenge of youth unemployment, we’ll not only empower individuals in these areas but also create a viable means of growing the number of outlets in these local and traditional markets,” she says.

Looking at the strong competition from growing shopping centres, malls and foreign owned shops in the townships, when asked how they prepared these emerging entrepreneurs to cope and flourish, Mqhayi says one of the most important things that they want to do is help the youth in townships to understand the importance of partnerships, as well as the importance to create their own unique value proposition.

“For them to compete viably, they will need to work smart and leverage their collective buying power for example. This will enable them to negotiate better discounts for themselves and improve profitability,” she concludes

The company is hoping to take this successful project to Rustenburg and KwaZulu-Natal later this year.

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