The informal trade, or traditional trade, market in South Africa plays a crucial role in the economy and society. With a rich history deeply rooted in traditional practices, these informal markets provide a lifeline for many individuals, particularly in marginalized communities.
The definition is broad and includes traders from counter-service outlets, vibrant street vendors to bustling open-air markets. This informal trade sector contributes significantly to employment, entrepreneurship, cultural preservation, and community cohesion.
According to a recent report from Retail Brief Africa, the total market value of the township economy is estimated to be R900 billion (USD50 billion) with approximately 60% of the market considered formal and 40% informal. Around R150 billion in cash is spent at the estimated 150 000 spaza shops every year, which contribute as much as 5.2% to South Africa’s GDP and employ 2.6 million people.
Clearly this is an important market sector, but understanding these markets and obtaining useful data on their locations, product offerings, customer base and so forth is no easy matter.
Frontline Research Group specialises in the informal trade market
Frontline Research Group have been conducting retail census and retail audits throughout South Africa since the ‘90’s and they are specialists in the informal or traditional trade space.
Steve Johnson, Managing Director of Frontline Research Group, says, “Recognizing the economic significance of the informal sector prompts FMCG producers to implement measures that enhance the formalization processes thus ensuring that their products are not just available in the spaza shops and vendor stands, but that they manage the route to market effectively.”
Many informal businesses operate outside the regulatory framework and their sales information is simply not available through any kind of formal structure.
Frontline Research Group have conducted a retail census in some of the most economically important townships in South Africa, and are continuously updating these, as well as conducting continuous retail audits with some of the most well known brands in the country.
“We have developed specialized tools and procedures for gathering accurate market data and have specialized software for recording, analyzing and monitoring this data,” says Steve.
Frontline Research Group are able to provide information within the traditional trade space on a brand’s sales volume, sales trends, stock levels, presence and effectiveness of in-store display and promotion efforts, and other associated aspects.
Steve adds, “If you need to know how well your brand is placed, compared to your competitors, or how your distribution channels function, and how to become more efficient in this space the Frontline Research Group can find the answers.”
The information and tools that Frontline Research Group provides, will give you the competitive advantage you need to grow your brand and increase your sales revenue in the informal sector.
For more information or to obtain a quotation contact Steve Johnson, Managing Director, on Tel: +27 (0) 86 999 0407 Email: steve@frontlineafrica.com