TRI PLE TRUST ORGANI SATI ON SPAZA SHOP BDS PROJ ECT - - PowerPoint PPT Presentation

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TRI PLE TRUST ORGANI SATI ON

SPAZA SHOP BDS PROJ ECT PRESENTATI ON SEEP AGM , W ASHI NGTON DC 01 NOVEM BER 2002

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The Triple Trust Organisation (TTO)

Based in Cape Town, South Africa Started in 1988 Mission – Poverty Alleviation

through Enterprise Development

Goal is assisting people to be

self employed

Historically a Training Service

provider

Changed focus to become a MDA

Facilitator

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Basis for change..

Limitation of previous approach External evaluations Internal evaluations Exposure to the BDS “best practice”

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And this is why I am here…

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TTO PLP project - Spaza Shop project

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Definition of a Spaza Shop

Spaza

Hidden, quasi, makeshift, house shop

Spaza shop

An informal shop operating from the owner’s premises, inside or in the backyard, or in containers Largely selling convenience goods, bread, paraffin, milk, etc. Seen as a means of survival by many

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Why the Spaza shop market

Spaza shops are the domain of the poor Market with potential for efficiency and

growth and impact

Spaza shops interface directly with the

poor on a daily basis

It is a billion Rand industry (R1.02b) The potential for the model to be

replicated elsewhere in the country

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Retail industry market share

R 14,890 R 12,000 R 650 R 1,200 R 810

R 0 R 2,000 R 4,000 R 6,000 R 8,000 R 10,000 R 12,000 R 14,000 R 16,000 Total trd Rtlrs W/F HKrs Spaza

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Project objective

To improve the efficiency of Spaza

shops

To stimulate the Spaza shop market for

BDS

To develop the BDS market for Spaza

shop specialist service providers

To stimulate economic activity resulting

in poverty alleviation

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TTO’s project approach

Project divided into 3 phases: Phase 1

Commissioning of a Desk-top

research Phase 2

Commissioning of a study of the

Spaza shop market Phase 3

Intervention design and

implementation

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Challenges in Phase 1and 2

Deciding on what appropriate research tools and methodologies to use How do we find BDS in weak markets The limited documented BDS information on the Spaza market

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Progress to date

• Phase 1 of the project completed

Survey of 300 Spaza shop owners 6 Focus Group Discussions Survey of 300 Spaza shop customers Documented Research report 12 key findings Picture of the Spaza shop market

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What did we find?

Spaza shop market

• It’s a US102m market

per annum

• The customers are

mainly low-income earners

57% percent of Spaza

• wners would consider

registering their businesses

• The common goods sold

are bread, paraffin and matches

Spaza shops don’t get

any preferential treatment from suppliers BDS markets for Spaza

• wners

Most Spaza shop owners

did not receive any formal support to start their businesses

Most Spaza owners

don’t know of any

• rganisation that
• ffers business

support

Most Spaza shops

received informal support from various sources There are major problems/challenges that Spaza owners have to deal with in their businesses

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Challenges/problems…

Insufficient and limited range of stock Links to suppliers Links to credit Transport related problems Transport services Organizing for group transport Storage related problems Links to storage facilities Setting up local storage points Environmental problems Pest control services Access to better storage containers Theft Security services Access to better security devices

Problem s Possible BDS

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Spaza shop supply and distribution channel

RETAIL DISTRIBUTION WHOLESALE MANUFACTURES

Classification

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What we needed to know but didn’t ask…

Total amount spent on a basket of goods by brand and by source Customer purchasing behavior patterns /habits Understanding the diverse mix of Spaza shops Understanding the variety of supply and distribution chains

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What have we learnt…

The value of the research tool and its limitations There are still gaps in our understanding of the market There are questions we should have asked but didn’t The importance of understanding the market before intervening Where to look for information and how to find it The importance of managing the research project very tightly

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What are we to do next…

Address the priority gaps in

• ur knowledge of the Spaza

market

Understand the BDS market in

the Spaza shop market

Understand the different

product supply and distribution channels

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Challenges in Phase 3

The Spaza shop definition not inclusive of entire market Expanded the definition to include all Spaza shops Most BDS in Spaza shops embedded, informal or non-existent Designed the questions differently to uncover “hidden” BDS Use the most suitable market assessment tools to uncover hidden BDS Creatively use a mix of available tools using the “problem/solution” approach The ability to quantify BDS consumption in a weak market Use Product concept testing and Price sensitivity as part of problem/solution approach

Challenges How handled

To find the most efficient way of reaching implementation phase Using the experience and knowledge gained and adapting research tools to suit our needs

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W hat do w e do i f w e f i nd…

BDS mainly embedded and informal Work with suppliers to leverage BDS in the range

• f products on sale to

Spaza owners Suppliers reluctant to get into the Spaza shop market Design appropriate distribution and payment mechanisms to remove barriers No suppliers for some services/commercial BDS for lager Develop potential BDS suppliers to provide that specific service Low awareness and understanding of BDS Conduct awareness raising campaign among Spaza

• wners

If we find… We could…

Spaza owners cannot pay up front Assist BDS suppliers to develop innovative payment options