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Television’s influence as a marketing tool among township residents is fast losing its impact. This is one of the key findings in the “2022 SA Township Customer Experience (CX) Report” undertaken by digital agency Rogerwilco, market research company Survey54 and Marketing Mix Conferences.
The finding raises the questions of whether the medium is still important for this segment and whether the impending analogue switch-off is affecting consumer perception.
The study says WhatsApp and Facebook have become vital channels for this audience, and recommends a larger consideration for TikTok in future campaigns. In addition, it says, influencers are becoming less important and brands should think twice before relying too heavily on this approach in townships.
The report is a vital primer for brands operating in this space, given that almost half of SA’s urban population live in such areas — and more than 60% do so in places like Cape Town.
While unemployment is rife and household income low, in aggregate the township market represents hundreds of billions of rand of spending power. Yet little publicly available data exists to help marketers better understand how to tailor their messaging to speak to the needs and wants of this substantial audience.
The second edition of the report comes at a time when the kasi economy is leveraging its local brands to grow. Most respondents (75%) said they would buy local instead of international fashion brands on their store accounts, while township businesses are consciously branding themselves. In comparison with last year’s report, when the outlook seemed negative, kasi entrepreneurs have proved to be resilient, with township residents — 44% of respondents — saying they are spending more in the informal economy.
This underlying thread is also evident in the emergence of food delivery alternatives such as Delivery Ka Speed and Order Kasi, both meal delivery services that exclusively offer food from restaurants based in townships.
The kasi economy is building solutions and alternatives that enable growth and convenience. With increased access to fibre in the home and cheaper mobile data, the study predicts, this trend will rise, as 29% of its respondents said they ordered online from small independent food outlets.
Coming out of restrictions and the challenges of Covid, the SA township market is showing greater resilience and drive to build solutions for local markets
With the purchasing of clothing being an integral part of the shopper experience, the survey asked township residents whether they were more likely to buy local or international fashion brands using their store account. The results were that 74% of respondents were more likely to buy local fashion brands using their store accounts if these brands were easily available in stores where they shop.
When asked about the brands they would buy using store accounts, township residents showed a preference for footwear brands Bathu and Drip. Bathu took the lead, with nearly 29%. It was followed closely by Drip, at 25%. Tshepo Jeans came in third and fashion brand Rich Mnisi fourth for store accounts.
In the 2021 report, 28% of respondents said they had bought something online. This year that figure had jumped to 70%. The report says: “The younger the audience, the higher the propensity is for online purchases. Interestingly … when the data is viewed through the filter of employment vs unemployment, activity is the same across the board. At home Wi-Fi is enjoyed by 48% of respondents.”
This year’s report includes on-the-ground conversations with people who are involved in the growth of the township economy. It shows a more positive outlook than last year’s report. Coming out of restrictions and the challenges of Covid, the SA township market is showing greater resilience and drive to build solutions for local markets.
In the 2021 report cash ranked in first place, and this year is no different. Bank cards sit at second spot — once again, no change. What has changed is the No 3 spot. Last year store accounts were third and mobile payments fourth; this year they’ve swapped. While the gap is small, there is an indication that perhaps trust in financial institutions is growing.
Seventeen percent of respondents said they did not have a phone that supported mobile payments. Most mobile payment solutions require a smartphone and the estimated number of smartphones in the market is at 63%. It is likely that those who are resistant to mobile money payments have phones that do not support it.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.