IDO LEKOTA
Clicks’ KwaMakhi brand – taking on the R900 billion township market – arrives carrying the language of familiarity. The name, roughly invoking the idea of “at my neighbour’s”, suggests the intimacy of the corner shop, the convenience of walking next door for bread, milk or sugar, and the social trust that has long sustained township retail.
Yet beneath this neighbourly imagery lies a harder commercial reality. KwaMakhi is not simply entering the township economy; it is entering the township market estimated with the explicit ambition of competing with spaza shops and other discount retailers. Its first outlet opened in Tembisa, with Clicks planning an initial rollout of 10 stores and committing about R30 million to the experiment.
The irony is difficult to miss. A large corporation is borrowing the cultural language of the township’s small traders at precisely the moment it is positioning itself to compete against them. The spaza shop is not merely a retail outlet. It is a neighbourhood institution, sustained by familiarity, proximity and relationships.
It sells small quantities to households with irregular incomes, often opens beyond conventional trading hours, extends informal credit and provides a degree of convenience that formal retailers have historically failed to offer. KwaMakhi’s appeal depends, in part, on the very social world that spaza owners built through years of persistence in an economy that excluded them from formal markets.
The concern, then, is not simply that a corporation has chosen an African name. Cultural appropriation becomes a serious economic question when corporate capital adopts the symbols, language and social meanings of a marginalised community in order to market an enterprise that may weaken the community’s own entrepreneurs. The corporation receives the warmth of neighbourliness as a branding asset. The small trader is left to confront the price war.
Clicks will understandably present KwaMakhi as a response to consumer needs. Township residents deserve access to affordable products, reliable quality and decent shopping environments. There is no virtue in romanticising hardship or insisting that consumers pay more to preserve businesses that cannot meet their needs. Nor should every new formal retailer be treated as an enemy of development. Competition can improve service, expose inefficiency and widen consumer choice.
But consumer benefit is not the same as economic empowerment. A community does not become economically developed merely because more branded stores open in its streets. The more important questions are who owns those stores, who supplies them, who earns from them, who controls the distribution networks and where the profits ultimately go. If township residents participate chiefly as consumers and low-paid employees, while ownership, procurement power and strategic control remain elsewhere, then the township has been included in the corporate market without being included in the ownership of the economy.
That is the extractive relationship at the heart of South Africa’s economic imbalance. Communities are described as underserved when corporations want access to them, but their entrepreneurs are treated as informal, inefficient or obstructive when they demand ownership and influence. The township suddenly becomes a strategic growth market when its households represent billions in potential spending.
The structural disadvantage of the spaza owner is obvious. The trader purchases in small quantities and often at higher prices, operates with limited working capital, pays costly transport charges, faces insecurity and has little access to refrigeration, storage, technology or formal finance. A major chain enters with bulk procurement, established logistics, professional marketing, information systems, corporate finance and the ability to absorb temporary losses. This is not a contest between equivalent entrepreneurs. It is a contest between a household enterprise carrying the risk of survival and a corporation managing a calculated expansion strategy.
The experience of Pick n Pay’s entry into KwaMashu offers a warning. Research found that spazas closest to the retailer experienced declining customer numbers, stock levels and profits. The effects were uneven: some businesses farther away were less exposed, and certain traders benefited from easier access to supplies and lower transport costs. But the broader lesson was that formal retail could alter the local competitive environment in ways that small businesses were poorly equipped to withstand. Only a minority of shopkeepers introduced new products or services in response, while most struggled to mount an effective counter-strategy, research space.
It would be unfair to interpret that limited adaptation simply as entrepreneurial complacency. A trader whose income is already falling has little money with which to experiment. Diversification requires equipment, market information, reliable electricity, storage, working capital and time. The small entrepreneur is told to innovate while being denied the conditions that make innovation possible.
The large retailer, by contrast, enters with the infrastructure and financial resilience that government programmes have repeatedly promised but rarely delivered to township businesses at scale.
This is why the celebration of KwaMakhi’s job creation must be treated with care. The company has indicated that each store will employ about six people. That may be welcome, but the relevant calculation cannot stop at the jobs created inside the new outlets. It must also consider livelihoods lost if nearby spazas experience declining sales, lower margins and reduced stock turnover. A handful of formal jobs cannot automatically compensate for the erosion of numerous household enterprises, particularly when those businesses circulate income within the community and provide livelihoods beyond the person standing behind the counter.
The Competition Commission’s findings underline the scale of the challenge. Only a small proportion of township businesses reportedly succeed in selling through formal retail channels.
Township entrepreneurs are therefore close enough to be targeted as consumers but too marginal to participate in the supply chains that create durable wealth. Their communities generate demand, but established corporations retain the capacity to capture the value created by that demand. This is not merely a commercial problem. It is a failure of public policy. Government has spent years speaking about the township economy as though its development can be achieved through conferences, slogans and promotional campaigns.
Yet where are the collective purchasing platforms that would give spazas greater bargaining power? Where are the affordable working-capital facilities, storage centres, distribution systems and digital tools? Where are the procurement arrangements requiring major retailers to source meaningfully from township manufacturers, farmers and service providers? Where are the protections against the steady concentration of economic power?
The political theatre is that government praises the township entrepreneur in public while allowing the most lucrative opportunities to be captured by firms already equipped with capital, scale and market access. The language is empowerment; the outcome is dependence. The township is invited to consume more efficiently but not necessarily to own more productively.
Clicks should not be prohibited from competing, but neither should it be permitted to define local development according to its own marketing claims. The company should disclose how many township-based suppliers will benefit, the value of contracts awarded to local businesses, the quality and duration of the employment created, and whether independent spazas can become suppliers, franchisees or partners. It should measure and report the effect of its expansion on nearby informal retailers. Government, for its part, should make meaningful local economic participation a condition of market entry rather than leaving the township to absorb the social costs of corporate expansion.
There is also a need for honesty about the responsibilities of township entrepreneurs. Some businesses must improve their hygiene, service, stock management, pricing, record-keeping and use of technology. Informality should not become an excuse for poor standards or exploitation. But demanding that small traders formalise and become competitive while leaving the structural imbalance untouched amounts to economic cruelty. The trader is expected to overcome every obstacle individually, while the corporation receives the benefits of scale collectively.
The issue is therefore not whether township residents should have access to affordable goods. They should. It is whether affordability must be achieved by displacing local ownership rather than strengthening it. It is whether the township should be treated as a community whose productive capacity requires investment or as a consumer frontier from which corporations can extract the last available rand.
KwaMakhi may become a successful brand. It may offer convenience, lower prices and more reliable access to everyday goods. But the success of KwaMakhi should not automatically be confused with the success of the township economy. A chain can thrive while local enterprise withers. Sales can rise while ownership remains concentrated. The township can become more commercially valuable without becoming more economically powerful.
The decisive question is whether KwaMakhi will help township residents build ownership, supplier opportunities, skills and bargaining power, or whether it will simply make the township more profitable for corporations that already possess them. If the language of neighbourliness is used to market a corporate advance against the neighbourhood’s own entrepreneurs, KwaMakhi will become a symbol of a broader South African pattern: the appropriation of local culture alongside the extraction of local value.
The township is not merely a place where corporations can find their next customer. It is a community whose entrepreneurs have survived decades of exclusion and built an economy out of limited means. They should not now be expected to surrender even the last drop of value from their fragile businesses in the name of inclusion.
