This week we received 4 x R500 Takealot vouchers as a Christmas gift from one of our clients and gave then to 4 staff members. These staff members have been with us for years and have known two of them for about 15 years.
What I found surprising was none of the 4 have ever purchased items online before and my daughter had to show them what to do. These staff members earn a n above average salary and have never bought anything online before and it makes you think that this is the norm and not an exception. I find this rather telling and sums up South Africa in a nut shell and highlights how small the customer base really is.
Yesterday I posted about the 1.5% working population responsible for over 60% of the total SA tax revenue which equates to around 934K people as a number. If you throw in a guesstimate of roughly 1 million ex pat retirees from around the world residing in the Cape then you are looking at a shopping customer base of around 2 million people. This is a very small number and why having so many shopping centers around the country is some what mis leading.
I know in the UK in order to build a shopping center you require a catchment area of a minimum of 200K people in the vicinity. South Africa has over 3000 shopping malls or strip shopping malls compared to the UK which has under 700 malls and roughly 1500 strip malls. The big difference is the customer base is more affluent in the UK compared to SA.
The large bulk of the population in SA lives under the poverty bread line and shopping for presents or other items is seen as a luxury. Those unemployed which is a very high percentage of the population earn R350 monthly from the state hand out which is less than $20. This would be used on basic foods and would allow a person to purchase 1 loaf of bread per day with no money left over.
One of the 4 employees who received a R500 gift voucher is saving up for a lap top and is the youngest of the 4. At least I am aware of this and in the New Year will help speed up his savings to purchase the lap top quicker. What we would deem as basic items the local population has to budget and save.
R500 is roughly $30 and I would have no idea what my staff would budget for presents over the Christmas period and even if they buy presents or not. The staff members are at least working and earning a salary and will receive a 13th cheque as a bonus and something we make sure happens each year. Most will use that to pay off whatever bills they have outstanding and to clear any debt.
The shopping customer base is very small in SA and why I am some times puzzled to see another shopping center opening and guessing as to where the customers are going to come from. We had a shop in 2005 in Gateway Sopping center and everyone said it takes 5 to 10 years for a center to be established. Most shops make losses over the first few years and it was a struggle for our business until we found and concentrated on certain items that sold well.