LaunchLab zooms in on student spend

Startup enables students without credit cards to shop online

STUDENTS spend about R30.4 billion a year. This was said by Kwanda Mkalipi, a student at the University of the Western Cape (UWC), Yolisa Nocanda, also from UWC and Lerato Rabotapi, from UCT, when they pitched their start-up to executives of Nedbank LaunchLab in Stellenbosch this week.

The students founded Fingertips, which enables students without credit cards to buy online.

The Nedbank LaunchLab, in partnership with Stellenbosch University, provides budding entrepreneurs with skills.

LaunchLab’s incubator programme houses student ventures, university spinout companies and entrepreneurs from the community.

Since it was launched in 2015, more than 75 companies have been incubated and nearly 200 jobs have been created.

Mkalipi said South African students spent an average of R2 702 a month, or R32 424 a year, whereas the average South African spent about R2 503 a month, or R30 036 a year, according to Student Village, a marketing company that focuses on the student consumer market.

He said students represented a potential market of R30.4bn.

Mkalipi said students spent more than the average South African because they received money from multiple sources, such as their parents and relatives.

Mkalipi said about two years ago, when he and his friends were shopping online, they found they could not transact without a credit card. As a result they created Fingertips, which allows students to shop online using their student card.

They visit the site and choose what they want to buy. When they get to the checkout section, instead of entering their credit card details, they enter their student number and the PIN they created.

Chris Wood, an executive for emerging payments and strategy at Nedbank and a LaunchLab board member, said: “We are excited to see how we can continue to partner in the community to help grow entrepreneurship and innovation in our country, which is so necessary for growth. It also allows us to be close to the coal face of innovation.”

Jason Muscat, a senior economic analyst at First National Bank, said consumers have become more conservative and circumspect in their spending.

“Inflation has been elevated for some time, pushing up the price of goods and services, so consumers have been adapting their spending patterns, buying fewer durable goods in order to afford the essentials.

“With inflation moderating and interest rates likely to be lowered further, there should be some relief for consumers over the short term, but the long-term outlook remains depressed.”

The Nielsen Consumer Confidence Index for the second quarter of this year showed that concerns about the economy and job security and increasing food prices had resulted in consumers deferring their spending and focusing on servicing debt and saving.