In recent years there has been a number of articles and research conducted on the economics of what was once considered “townships”, which have now evolved into natural, high population suburbs.

One of the BuddiBox target markets, Soweto, with a mix of LSM groups from low income earners to a larger and growing middle class is home to 40% of Johannesburg residents (Roots, 2013), the data showed that monthly household income in these 10 suburbs ranges from R6 000 in Jabavu to R8 900 in Orlando and is topped only by R11 400 in Protea.

This represents a respectable market size, which is currently underserviced and therefore presents favourable opportunities in the retail and distribution sector.

The retail sector is dominated by a small number of FMCG companies, according to PWC (2012), in 2016 this sector is worth R 1.4 trillion across the supply chain. The Bank of America Merrill Lynch in 2011 estimated that as of 2013 the informal and independent retail sector is worth R115.6 billion with the total food and grocery spend in SA at R323.3 billion in 2013.

Population Statistics

According to the World bank, as much as half of South Africa’s urban population live in townships and informal settlements, accounting for 38% of working-age citizens. The table below shows the population numbers in township communities across South Africa (Stats SA, 2011)

The statistics above highlight the scope of opportunity that lies within these communities and is the reason we have launched opportunities centred on the retail sector.

In recent years, we have seen an emergence of established brands setting up large retail stores in township communities. While this offers townships access to goods and services, it does not address the socio-economic issues faced by these communities. Youth employed in the retail sector are limited to the lower echelons of economic activity and are not encouraged or motivated to achieve their full potential.

It is for these reasons BuddiBox was brought into existence, we believe that this opportunity will have a meaningful impact on youth, ignite their entrepreneurial spirit and provide them with the platform to achieve their full potential, while benefitting the communities they reside in and offering solutions for businesses to increase their earnings.