Extensive research by several organisations on how foreign-owned spaza shops are run provides a great deal of insight, although I’ll admit the picture is not always complete and, at times, contradictory.
The nonprofit organisation Sustainable Livelihoods Foundation is one of them. In its Formalising Informal Micro-Enterprise (FIME) project, it interviewed 950 spaza-shop businesses in eight townships between 2010 and 2013.
The research affirmed that foreign-run shops dominated the market. More than 51.5% of spaza shops in the survey were run by foreigners, and these were often linked to partnerships.
Typically, they were owned by Somalis, Ethiopians and Bangladeshis, although it did note that several South Africans were equally competitive.
One key advantage of these larger partnerships is that, by clubbing together, they had more start-up capital (between R20 000 and R60 000), enabling them to stock their shops well. Each store spent, on average, R7 000 a week on stock.
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