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Cracking the “invisible” market

Spaza shop resize

There are many potential billion rand markets in townships around South Africa. In this extract from GG Alcock’s book, KASINOMICS – African Informal Economies and the People Who Inhabit Them, Alcock discusses two examples of billion-rand industries – only one of which has been cracked by formal marketers.


Township Takewaystakeaway shop

To enter and be successful in marketing and selling products to these invisible markets the trick is to minimise the risk of investment through knowledge and information. Sadly, there are no research documents from esteemed universities or surveys by market researchers, so business people need to do this the old-fashioned way – grab a taxi, shay’iround, get their shoes dirty treading the dusty streets of ekasi and emalalini or maybe paddle down the Tugela.

It is with the dagga lesson in mind that I approach the launch of Parmalat Individually Wrapped Cheese Slices first in the Soweto market and later throughout Southern Africa. This is a premium product, a slice of processed cheese wrapped in a plastic sleeve, and not the kind of product one would expect would gain any traction in the lower end retail sector, let alone in the informal spaza sector. Who could imagine that we could create an entire product category now worth approximately one billion rand in South Africa? Launching this improbable product into the township takeaway market allowed Parmalat to generate hundreds of millions of rand in sales in an invisible market; a market which is now hotly contested by all the dairy industry players in the business. Today it seems as if everyone is falling over themselves to get their cheese slice into a kota or a vetkoek.

John Dube (not his real name) has a tiny shack shop with a metre square hole in the wall in Orlando East, a suburb close to Vilakazi Street in Orlando West, Soweto. Vilakazi Street was home to Nelson Mandela and Desmond Tutu, both Nobel Peace Prize winners and neighbours in this famous street. John has just bought a beautiful Jeep Grand Cherokee.

“Nice car,” I comment.

“Thanks,” he says. “I am so happy to have it but, yo, I struggled to get it.”

“Ja, they are expensive.” I imagine him saving forever for his dream car.

“No, not the price. I had over R500,000 with me when I went to Jeep, but they wouldn’t take my money. Some Fica or such-such thing, they asked me to fill in a form saying where I got my money. Ja, so I filled in the form and where it asked where did the money come from, I filled in amaKota. So the salesman says, what’s a kota, looking at me like it’s a drug. I explain, and he shakes his head. I call the black guy washing the Jeeps. Tshela umlungu wakho, what is a kota? (Tell your white man what is a kota).

“The kota is a hollowed out quarter loaf of bread, hence the name, filled with different ingredients: slap chips, polony slices, fried egg, atchar, tomato sauce. This is the burger of the Gauteng townships where there is a kota outlet on practically every street, school yard and taxi rank.

“And this white man says, suka, go away, you can’t make this money from selling these kota thingies. So I had to ask my friend who has a business in town to pay for the Jeep and I paid him. Hayi, you white people, so ignorant of the township!”

Invisible moneyOrlando towers in soweto

The kota, this township burger, is so popular that John’s little outlet on its own has 600 loaves of unsliced bread delivered each day to be cut into 2,400 kotas. His staff peels 80 bags of potatoes to make the slap chips. Yep, 80 bags of potatoes a day, six days a week. That’s 2,400 kotas a day at one outlet making a profit of around R12,000 a day for the owner. And there are kota outlets everywhere, even if they are not as big as John’s. Do the maths. It’s massive and seemingly invisible, yet it’s not invisible, it’s there when you know what to look for in the informal sector. The cheese slices alone which go into this sector are conservatively estimated to be worth R400m a year in sales.

But wait, that’s not all. There is also the vetkoek, or amagwinya, a deep-fried pastry, literally a “fat cake”, which is also consumed with polony, liver paste or atchar. Every morning outside Mama Grace’s home in Pimville queues form. BMWs and Corollas pull up and their drivers join the queue, maybe 50 people deep at any given time between 6am and 10am. The queue chatters away and reads the Daily Sun, sharing township gossip and stories of tokoloshes and love triangles until they reach the window of the little four-room house. They reach in and are handed a little plastic bag or greaseproof paper packet containing four vetkoek and the polony or whatever they have ordered. A cup of hot sweet tea completes breakfast. Mama Grace on her own makes and sells 3,000 vetkoek a day at R1 each plus extra for the polony or liver spread which goes inside.

The same vetkoek and kota scene is repeated over and over and over at taxi ranks and in the streets of the township. Not some streets, not main streets, I’m talking every fucking street in the townships in Gauteng, not to mention Limpopo, KwaZulu-Natal and other provinces. Do you know how many vetkoeks that is every morning? How many kotas for lunch every day? And in my mind and if I get my way, which I do eventually, everyone is wanting a slice of cheese in their kota or vetkoek, a Parmalat cheese slice.

Selling the numbers

Masiphumelele Township, Cape Town.

Masiphumelele Township, Cape Town.

At first Parmalat’s brief to Minanawe was to explore the township school lunchbox market. We saw things differently. Minanawe’s job convincing Parmalat would be a hard one if we resorted to PowerPoint slides and research data. So instead my large manager, Fats Maluleka, and I dragged the brand team into the township at 5am – township breakfast time. Wiping the sleep out of our eyes, we climb out of the taxi at Bree Street in downtown Joburg and join the huge surge of people moving in every direction in organised confusion towards a million destinations. Fats did not get his name for nothing: he is a huge, affable, charismatic Soweto boy. He has the street sense and urban investigation instinct of an elite intelligence agent as he leads us into pastry Armageddon.

The smell of oil and pastry wraps around us like a London smog and the mamas chatter to each other and regular customers as for every 50m walked thousands of vetkoek are sold. Block after block we go, Fats’ large shape elbowing aside the crowds like an icebreaker as he leads the marketing and brand managers, both of them chewing on yummy gwinyas and pointing excitedly like Japanese tourists in the Kruger Park.

“There’s another, and there and there and there … Bliksem, Fats, do you really think we can get cheese slices into ALL of these?”

He proudly drives the marketing director Ryk, fresh new brand manager Janine and me from the pastry heaven of a million breakfast vetkoek, to kota queues in lunchtime Soweto –  the length of the queues testament to the popularity of these township takeaway meals. We convince Parmalat to drop their idea of getting cheese slices into English sandwiches in the township but rather into the kota and the vetkoek. Along with this we develop a marketing, sampling and sales drive – a campaign as local as the township meals it tries to own.

In some ways launching the cheese slices was simple; in other ways it was genius. Once we had demonstrated the existence and scale of the township takeaways, we needed to make cheese slices ubiquitous. Knowing the lie of the land, we developed a huge database of outlets which sold kotas and vetkoeks, and then Minanawe activation teams sold in cheese slices to an outlet with an associated promotion. Whatever stock the outlet bought we matched with a sample to the queues lining up for their kota or vetkoek.

“Try a vetkoek with and without cheese. WOW, that melting cheese in a warm vetkoek is incredible.”

“Why not have a slice of cheese instead of polony in that kota? Try it and taste the difference!”

The rich creamy cheese taste melting in the kotas and vetkoek was an instant success. Consumers started walking past their favourite outlets to the ones which offered cheese slices. “Vetkoek and Parmalat” becomes a normal order, “Parmalat” quickly becoming the generic term and quality standard for cheese slices.

Paintings on kota outlet walls serve as menu boards, each food inclusion to the kota or vetkoek – be it a slice of polony or a spoon of atchar – adding R1 or R2 to the basic price. These elaborate hand-painted menu boards are creative but poor attempts at appetite appeal. So we begin to replace their menu boards with our fancy Parmalat menu board: delicious depictions of kotas with cheese slices, we add a cheese slice to each menu item. Soon not a single outlet in Soweto will sell a kota without a cheese slice, then it’s Gauteng, then we roll out the campaign around the country.

Changing the game planmarket

Of course it’s still critical to know the market. There are no blanket solutions because each region or township has its own idiosyncrasies. Kotas are huge in Gauteng and Limpopo and big in Mpumalanga, but in KwaZulu-Natal and the Eastern Cape they do not do kotas. Instead the chosen takeaway food is amagwinya, literally “the mouth waterer”. A gwinya is a round dough cake the size of an apple. Strong brown hands knead and mix the dough and yeast the night before in a tin washing basin, leaving it overnight to rise. The next morning large basins of dough are formed into balls and dropped, hissing, into large 50-litre pots of oil boiling precariously on gas stoves on practically every street corner. Passersby grab the amagwinya hot out of the oil for one rand each. Usually eaten on its own, or with a slice of polony, it becomes heavenly when a Parmalat cheese slice melts in the hot soft fried bun.

Soon wholesalers around the township are calling the Parmalat sales team, desperate to stock Parmalat cheese slices. Ryk just smiles every time I visit and ask how sales are looking. He and Janine become experts at kotas and vetkoek, early converts to the power of an invisible mass market.

This helps when we start pushing to brand the individual slices. The factory thinks this is crazy, why would you want to brand EACH cellophane wrapper? It’s a manufacturer’s nightmare, but for a marketer who knows that the only experience most consumers have is not a packet but an individual slice, it’s a hurdle worth overcoming. Dairy competitors are eyeing this market and we need to create a brand, not just a category. Branding Parmalat slices individually becomes critical.

As part of this drive, consumers are encouraged not to ask for a cheese slice but for a Parmalat, the one with the logo on each individual wrapper; if it’s not branded Parmalat it’s a fong kong, a cheap and nasty. The standard of quality for an individual slice becomes Parmalat. Along with intensive street by street activations and a massive outlet loyalty campaign we begin to own the market. As I write, 13 cheese slices are being consumed every second of every day – that’s more than 200 million slices a year!

There are invisible markets all around us. In or around which one can you create a new industry? Open your eyes to the economies, markets and product categories which are under the formal market radar.

The sliced cheese sector wasn’t invisible; black marketers live in these areas and drive past these market opportunities every day. They chose not to see them. They looked and saw black people with cents to spend, and didn’t see the potential because they were targeting and attracted to higher income spenders. A black marketer who is blinded by social prejudice to business opportunities within his own market is as blind to a company as a white marketer who lacks any social or cultural connection to the market.

Healing Herbshealing plants

Sizani Mbatha is a stone mason. A wizard with rock, she can take the round dolerite boulders that redden the hills of Msinga and she can build walls with sides that are as smooth and flat as a brick wall. When she lifts a rock Sizani sees a jigsaw puzzle complete, she sees the space it fits, she sees the other stone that will mate and bond with it.

Sizani is slender with the shape of a runway model; she walks with the same upright stance, elegant, beautiful, sexy. She flows over the earth, glides over the rocks she designs with. When Sizani laughs the world brightens, warms – her laugh at once an invitation and a celebration. Sizani has never aged, her smooth light brown skin only slightly creased around the laugh lines of her large brown eyes; in summer her face is smeared with red ochre, the same red of the rocks she orchestrates into monuments. Sizani would have built the pyramids of Giza if she had been there. I have hovered at her feet since I was a small child, gazed with adoration at her beauty, passed her stones, laughed with her, marvelled at her creations of red dolerite stone.

Sizani never stops working, and so when the metallic clink of dolerite boulders forming themselves under her skilled hands did not arrive with the dawn, we knew she was really sick. She arrived back at work a few days later. She had been carried to a sangoma, a herbal spiritual medicine man, the healers of Africa.

The medicine of AfricaDrakensberg

“Mnumzaan,” she said to my father, “the sangoma said that the place where you work has great power, it is full of plants of power and healing, so go back to work, the plants there will heal you, they will protect you from ill.”

My parents’ garden, a rockery, was full of indigenous plants, beautiful plants. Great orange flowering aloes or yellow cascades of tree orchid flowers; but also little bulbs and creepers, tiny white tree orchids and creeping purple bushes. On long walks in the mountains my mother and father collected these plants on the crags and in the valleys of Msinga. Among them was a multitude of muti plants; plants in Africa are called umuthi (pronounced “oomootea”), the same word for plants and for medicine. For white people plants are for beauty and nourishment, but in Africa plants are bestowed with a great power – the power to heal, to protect and to soothe.

The muti industry is one which is part homeopathy and part spirituality. The average prescription is a combination of medicine, faith and ancestor appeasement. “Take this muti, mix it with maheu, drink it, then burn some imphephu, the ancestors will make it stronger.”

This is not the crazy tokoloshe bewitching story written about in the Daily Sun, although, like soapies, they generate great interest. This African healing industry is represented by sangomas, spiritual intermediaries and inyangas, the herbalists; sometimes they are separate entities, but more often one person.

The business of these homeopaths of Africa is worth more than R3bn annually. It is hidden from the sanitised wards and white coats of our formal medical world; piles of bark, bulbs, pulverised leaves, seeds, beads and animal parts dismissed with a shudder and a gasp. Huge but invisible, like Dalton Road on the pavements under Durban’s highway bridge, the thunder of traffic and holidaying Vaalies racing overhead; Faraday muti market stretching from massive pillar to pillar under the frenetic Joburg M2, a multitude of “chemist” shops, imphephu smoke billowing out from darkened doorways covered with a red and white sangoma’s robe. Prescriptions are wrapped in newspaper, placed in tiny beaded bottles or brown liquids of mixed herbs fill old Coke bottles closed off with wooden stoppers.

In a 2007 research paper titled ‘Economics of the Traditional Medicine Trade in South Africa’, the industry is estimated to be worth a massive R2,9b a year, and represents 5.6% of the National Health budget. With 27 million consumers, the trade is vibrant and widespread. There are at least 133,000 people employed in the trade, with a large percentage of rural women. The plant trade is a key rural industry and business incubator.

South Africa is not unique in this regard. Muti, inyangas and sangomas, the need to ensure the ancestors are at peace to ensure future good fortune, are African phenomena. Although there are slight differences from region to region, they are startlingly similar in practice, importance and size throughout sub-Saharan Africa.

In another research paper one of the authors of the South African report, Myles Mander, evaluated the scale of the Ethiopian muti market:

“The total federal government budget expenditure was estimated at ETB 24.7 billion in 2005, and the traditional medicine trade value was estimated as ETB 2 billion (some 8% of the total budget). Furthermore, government expenditure on medicines is estimated to be just over ETB 1 billion per annum, while the trade in raw medicinal plants is some ETB 423 million (R243m) (or 42% of current expenditure on modern medicines). The traditional medicine industry plays a critical role in supporting the government meet the population’s healthcare needs.”

(‘Marketing of Medicinal Plants in Ethiopia: A survey of the trade in medicinal plants’, by Myles Mander and WAAS International)

The muti market is showing a strong revival and emergence from out of the shadows. Moving from side streets and hidden pavements, it is growing. As much as western medicine works, there are some ailments and some spiritual problems that western medicine is seen not to heal so, side by side with its white-coated western partners, the red and white robes soothe their patients.

A question of sustainabilitySangoma

This massive market needs supply, a renewable supply, R3bn worth of supply! The demand for herbal and spiritual treatment is an environmental drain on an ever dwindling resource. Rocky hilltops are plundered for bulbs, marula trees and wild pear stripped of their precious bark, everlasting imphephu heather bunches plucked off high altitude Drakensberg grasslands. Poaching and plundering threaten these muti markets. Although small groups, such as a little company called Muthi Futhi in remote but now famous Nkandla, grow plants commercially for these markets, they do not make a dent in this huge African medical supply sector. It seems crazy that agricultural businesses have not supplied this need – this huge business opportunity. Commercially growing and supplying the plants would not only conserve threatened species but fulfil a billion rand demand for health and cure. But we drive past it, hidden as it is under highways, in dingy muti shops, spread out on sheets of newspaper and cardboard at taxi ranks.

The emergent black market demands old school walking the beat. It will never be fully represented or understood by sitting in a boardroom studying PowerPoint presentations. Speaking a local dialect helps, but the most important asset is an open enquiring mind.

Internal strategies must be developed and plans adapted to identify, understand and enter these markets in unorthodox ways which have a natural fit with the market culture.

Ingwe idla ngamabala – A leopard eats with his spots – a leopard uses his unique camouflage and knowledge of his food source to allow him to hunt and eat.


Kasinomics Cover - HRKASINOMICS – African Informal Economies and the People Who Inhabit Them by GG Alcock is published by Tracey McDonald Publishers. It is available in all good bookstores at a recommended retail price of R240.


Review overview
  • Mariette 11th March 2016

    What a great piece. I’m off to buy the book. I recently had to do some work in townships in around Welkom in the Free State and met some of the most inspiring people I’ve had the privilege of meeting in my life.
    One man sells braai fish instead of the normal meals on offer in that township. People told him not to because nobody would even buy braai fish. Joh, the people line up for lunch at his take away shop. That is entrepreneurship. Seeing a gap and differentiating yourself from everyone else in the market. Everyone should go have some lunch outside of your comfort zone. You will come back with more than your tummy nourished.

    • David A Steynberg 11th March 2016

      Great comment, Mariette.