ENTREPRENEUR: Sakhile Maseko’s luxury watch business is one to watch
After his bursary fell through, Maseko found suppliers of smart watches not available in SA, and an investor, and is now in business
Three years ago, Sakhile Maseko was forced to sell his guitar and smartphone to keep his dream of making it in Johannesburg afloat.
Thanks to the R3,000 or so in seed money that he managed to cobble together, the Swazi national, who’s now 21, runs a profitable business that employs 15 people and generates sales of close to R500,000 a month.
In June, Maseko even sold a stake in his operation, called Aumax, to Silvertree Internet Holdings, whose brands include Faithful to Nature, Ucook, and PriceCheck.
Aumax sells affordable luxury watches sourced mainly from China. It gets most of its leads from ads on Facebook, and then delivers watches to customers’ homes, where they can try them on before paying.
Maseko tells the FM that while he has always loved watches, he did not move from rural Swaziland to Johannesburg to sell them.
Rather, he made the move on the premise that he’d been awarded a bursary to study engineering at Wits University, thanks to his solid matric results.
But when he arrived, his bursary fell through. So, with only a few thousand rand to his name, and a reluctance to move back to his home country, Maseko moved into the Wits library for several months.
The library gave him free access to the internet and he wasn’t the only disappointed student who made the building his home. Maseko says friends let him shower at their nearby South Point student accommodation facilities.
"I never found it difficult — I just saw it as an opportunity to make things happen in Johannesburg. I said, you know what, I only get one shot so I’ll give [it] everything."
Maseko scoured the internet for watch suppliers in China — "I did a lot of market research" — and eventually found suppliers of smart watches that weren’t yet available in SA.
"That gave me a really good competitive advantage," he says, adding that he placed an order for about R3,000 worth of watches, which he delivered to customers himself.
"I was so excited," he recalls of his first shipment. He now sells about 500 units a month.
But being young and naive — he’s never earned a salary — Maseko admits that he made several mistakes along the way.
For instance, he got a little too enthusiastic and accumulated about R200,000 in credit card debt by placing large orders, while he was also fined in the early days for not having an importer’s licence.
With Silvertree onboard, he’s now getting professional assistance to help him with compliance procedures — such as auditing — and to grow the business, which currently operates in Gauteng, Durban and Cape Town.
"Pretty soon we’ll also be opening in other cities in SA and in the beginning of next year we’ll open a branch in Nigeria and some other African cities."
Maseko also plans to design and make Aumax-branded watches.
Silvertree co-founder and MD Manuel Koser told the FM recently that Aumax "is a freak of nature that shouldn’t exist — but it does and in a good way.
"It’s such a pleasure to work with someone who had to go through hardships and who survived this kind of very fierce struggle of entrepreneurship and got where he got to through hard work, being smart and pure will … And now we can help him to scale up."
Koser said at the time that Silvertree was searching for other companies ahead of its planned listing.
Like larger rival Naspers, it’s on the hunt for consumer-facing internet companies.
Launched in 2013, Silvertree generates annual revenues of about $40m. It bought online price-comparison platform PriceCheck from Naspers in 2015.
Silvertree expects to grow annual revenues to more than $300m by 2023, when it is targeting "a liquidity event, which most likely will be an IPO".
Koser co-founded online fashion company Zando and pan-African e-commerce group Jumia, which is now backed by MTN, Goldman Sachs, AXA and other global firms.