A fast route to the mar­ket

CityPress - - Voices -

Black en­trepreneurs are be­ing given a help­ing hand es­tab­lish­ing them­selves in the lu­cra­tive and fast-mov­ing con­sumer goods (FMCG) in­dus­try.

A ben­e­fi­ciary of this ini­tia­tive by the Na­tional Em­pow­er­ment Fund (NEF) is TMAC Dis­tri­bu­tion, a Buf­falo City metro-based com­pany dis­tribut­ing Nestlé FMCG to in­for­mal traders in the area.

The NEF has funded the busi­ness to the tune of

R2 240 000, lead­ing to the cre­ation of 19 jobs, in­clud­ing the owner man­ager.

NEF chief ex­ec­u­tive Philisiwe Mthethwa says the de­ci­sion to fund busi­ness ven­tures in the FMCG in­dus­try is driven by the de­vel­op­ment fi­nancier’s com­mit­ment to chang­ing the face of all in­dus­tries in the coun­try.

“The ma­jor­ity of peo­ple who sup­port the FMCG in­dus­try are black, but when it comes to own­er­ship the in­dus­try re­mains white.

“Fund­ing ini­tia­tives such as TMAC also show our level of ver­sa­til­ity when it comes to pro­mot­ing black par­tic­i­pa­tion in the coun­try’s econ­omy. To this end we are pre­pared to fund com­pa­nies that are vi­sion­ary enough to see syn­er­gies be­tween the for­mal and the grow­ing in­for­mal busi­ness sec­tor,” she says.

The 100% black-owned TMAC Dis­trib­u­tors was founded in 2016 by Tham­sanqa Zuko Booi, who holds a BCom de­gree from the Univer­sity of Fort Hare. He ap­proached the NEF for fund­ing to buy ve­hi­cles, stock and for work­ing cap­i­tal re­quire­ments.

Booi’s ca­reer high­lights in­clude work­ing on a Route to Mar­ket project, which en­tailed de­vel­op­ing a strat­egy on how best to tap into the grow­ing in­for­mal trade in South Africa.

Com­pa­nies such as TMAC were born out of the re­al­i­sa­tion that for FMCG com­pa­nies to pro­tect their brand strength and prof­itabil­ity – while taking ad­van­tage of the grow­ing in­for­mal trade mar­ket in the coun­try – they had to come up with in­no­va­tive mar­ket­ing strate­gies.

The dis­trib­u­tor model – as em­ployed by Nestlé and sev­eral other large FMCG com­pa­nies – has proved to be the most ef­fec­tive.

The model en­tails em­ploy­ing dis­trib­u­tors – such as TMAC Dis­trib­u­tors – to ser­vice in­for­mal traders di­rectly by send­ing their sales rep­re­sen­ta­tives to the spaza shops to take or­ders and then de­liv­er­ing the re­quired stock sources di­rectly from Nestlé ware­houses, elim­i­nat­ing the cost of buy­ing from whole­salers.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.