Jug­gling the dy­nam­ics of for­eignowned spazas in SA

At all lev­els of the econ­omy, learn­ing from ‘out­siders’, for­eign com­pa­nies, whose know-how spills over into our econ­omy, is an im­por­tant driver to rais­ing stan­dards and mak­ing us more com­pet­i­tive as a na­tion.

Finweek English Edition - - INSIDE - BY Buhle Nd­weni

Some­thing seemed amiss as I drove around Soweto over the week­end. On the street cor­ners, al­most all stores were locked with no sign of ac­tiv­ity. It would ap­pear that for­eign-owned small busi­nesses ser­vic­ing the lo­cal com­mu­ni­ties will re­main shut un­til fur­ther no­tice. This was quite the op­po­site to just two weeks ago, when the town­ship was bustling with in­for­mal trad­ing be­tween for­eign-owned spaza shops and lo­cals.

It’s not the first time that South Africa has ex­pe­ri­enced at­tacks against for­eign spaza own­ers, how­ever. When they orginally started in Diep­sloot town­ship in 2008, the at­tacks spread to other town­ships like Alexan­dra, but Soweto hardly ex­pe­ri­enced any.

How­ever, th­ese were not seen as xeno­pho­bic at­tacks, but crim­i­nal acts, where un­em­ployed youths took ad­van­tage of the anger to­wards one for­eign-shop owner. This also raised the is­sue of why for­eign­ers’ spaza shops were more suc­cess­ful than those of lo­cals. Last week, min­is­ter of small busi­ness devel­op­ment Lindiwe Zulu pro­posed that for­eign shop-own­ers share their trad­ing se­crets with lo­cal small busi­nesses.

Tash­mia Is­mail, head of the Gor­don In­sti­tute of Busi­ness Science’s (Gibs) In­clu­sive Mar­kets Pro­gramme, who con­ducts re­search into in­for­mal economies and mass-mar­ket dy­nam­ics, does not think this is the an­swer. She says that in a free mar­ket econ­omy it can­not be ex­pected of for­eign-owned spaza own­ers to re­veal their com­pet­i­tive edge, as much as big cor­po­rates would not re­veal their com­pet­i­tive ad­van­tage to their com­peti­tors.

“We can’t have dif­fer­ent sets of mar­ket-based prin­ci­ples depend­ing on

Res­i­dents loot­ing a shop owned by for­eign na­tion­als on Jan­uary 22, 2015 in Soweto.

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