🛒 How 12M of Us Buy Groceries...
Hi there,
Like seeing TV heroes cry? Amidst the ongoing Hollywood actors and writers strikes (against AI), Netflix just put out a job offer for a new AI product manager that pays R15.8M per year – while most actors get only R3’500 per day.
In this Open Letter:
- Kasi commerce: Changing how 12M people buy groceries.
- Bye-bye Blouberg, shipping hydrogen & you might already be a millionaire.
- Lean builds: 12 Tools for useful feedback on your MVP.
- Making Agri cool: Get the ins and outs from an Agtech founder.
- Poll results: What your degree is worth.
TRENDING NOW
Optimising How 12 Million People Buy Groceries
Not everyone can just pop to the shop…
One of the biggest consequences of apartheid was relocating people out of areas of economic activity into townships. (The numbers are hard to come by, but at least 12 million people are known to live in just SA’s 76 largest townships. The true figure is probably way higher.)
You might remember how, a few weeks ago, we covered how the minibus taxi industry was born out of this act. And how 15 million people’s daily transport is affected by the ongoing SA taxi crisis. Well, that’s getting from home (townships) to work (affluent neighbourhoods, cities and town centres).
But what about when they need to make the same trip for something as simple as collecting medicine or buying groceries?
The price of kasi commerce
Now, most of us don’t even consider the price of travelling to a store, since it’s so close by. But for millions of South Africans, it could cost an extra R35 to R55 plus just to be in a position to pick up meds or supplies. And it might take hours – sometimes you have to write off the whole day.
And it’s not only consumers. Rural business owners need to drive and expend quite a bit just to replenish their stock – and it might also cost them an entire day of business.
Save these people that R40 (or part thereof) and some time, and you might be in business.
But it’s not that simple
Deliveries and fulfilment in these underserved areas are complex and operators in this space typically face plenty of challenges, including:
- Low technology adoption and lack of trust in delivery services. If people don’t use it or haven’t used it, it can be hard to convince them to try. Township WiFi projects like Isizwe could potentially play a role here by offering banners and ads on their free internet access to drive engagement.
- Connecting driver and recipient. If the recipient happens to be far away (at a store) quickly driving home to collect is normally not viable. A route planner system with comms in advance could play a key part here.
- Safety. Some of these areas are either unsafe or have the perception that they are, making it hard to get drivers willing to work there.
- Payments. Making online payments is still a foreign concept to many people in this market. Perhaps this is something PayShap can eventually sort out should the fees come in at under R1 (or maybe even free)
Some of the pioneers
Iyeza Health is one of the earliest pioneers in this space, starting back in 2013 in the Gugulethu area near Cape Town. Many township residents have to make a monthly trip to the clinic to fill prescriptions for managing, amongst others, diabetes or HIV. Iyeza started delivering these meds via bicycle, saving people time and money in the process.
Thumela is the second startup founded by AgriKool founder, Zamokuhle Thwala, our podcast guest this week. They are tackling longer-distance logistics. Think: sending a parcel from Pietermaritzburg to Durban. They go from taxi rank to taxi rank, empowering several side-hustling WhatsApp entrepreneurs to deliver their goods cheaper and faster.
Order Kasi started out as the Uber Eats for townships but struggled with scale – as we said before, even at Uber Eats’ scale, it's hard to make money with this model. So in a similar vein to Mr D Food (Mr Delivery), they pivoted to focus on last-mile deliveries.
YeboFresh raised R78 million recently and is distributing to local spaza shops in townships. Shop thousands of products at competitive prices via the online store or WhatsApp. Your order is fulfilled within 24 hours to over 40 townships across Jozi and Cape Town – neat.
Zoning in on that R40 there and back, and the massive amount of time it takes, there are countless opportunities in this space. And considering the size of the market, it's understandable why there is already a lot of action.
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OVER TO YOU
What is the future of commerce in townships?
Vote to see how others voted, too.
- 🛵 Deliver goods there using e-commerce-like solutions.
- 📦 Spaza shops as distribution centres.
- 🏬 Large corporates to move in and establish malls etc.
- 💼 Service-driven solopreneurs.
- 🛸 Drones and robots, baby.
Login or Subscribe to participate in polls.
IN SHORT
🤑 Secret Millionaires. Some of us could be millionaires and we don't even know it. Supermarket giant Pick n Pay says there are about 250 million Rands worth of Smart Shopper loyalty points floating about unclaimed due to some 111 million shoppers not having registered their Smart Shopper cards. Better dust off those loyalty cards and see if you’re one of them.
🌊 The Tide is High. Laurika Rauch wasn't joking when she said: “Kom ons draf LANGS die strand” in her 1988 hit “Blouberg se Strand”. By 2100 you could be running on Doodles’ Deck as Bloubergstrand is set to lose over 100 metres of shoreline due to rising sea levels making this world-famous beach the 9th-most at-risk beach in Africa.
⚰️ Killing the bird. On Tuesday we shared how Elon Musk changed Twitter’s name and logo to X. Some pundits are saying the move wiped out significant brand value that took over 15 years to build with the amount thrown around anywhere between $4 billion and $20 billion. Not much of an impact given that Twitter has apparently “lost a huge amount of value” since Musk took over.
🏆 Record Breaking. Not only is South Africa already experiencing record-level days of loadshedding, but it’s also on track to reach record-breaking service delivery protests. So far in 2023, there have been 122 protests over failure to provide (ja, you guessed it) electricity and water and it looks likely to break the 2018 record: 237 protests.
⚓ Getting our ship together. Transnet has selected three consortiums to present proposals to build the Boegoebaai port all the way up the West Coast of South Africa. The port will be used to ship green hydrogen and other hydrogen derivatives, as well as manganese. Nice one.
BUILDER’S CORNER
12 Tools to Max Your MVP Feedback
So, last time, we shared cool tools for building your MVP itself. But, arguably the most important part of an MVP is not the product but effectively testing and gathering feedback.
See, when you put an MVP out there, you’re taking the Lean Approach, which says you’re actually only releasing in order to:
- Get early-adopter feedback.
- Assess if the market will pay for it (and how much).
- Figure out what to focus on in terms of user experience.
- See if you can locate and appeal to the right audience.
All so that you can iterate and slowly build up towards your final product.
That means you’re really looking at feedback, analytics, marketing and launch testing. Like so…
Add these peripheral tools to your MVP
- Customer interview tools
These are vital for MVPs as they help you understand needs, validate assumptions, and refine features through real user feedback, fostering a customer-centric approach and market validation. Consider Typeform for a fancy and effective option, or good old Google Forms as a free option. - Tools to build landing pages
Landing pages and marketing messaging are crucial for MVPs as they offer a cost-effective way to validate ideas, test messaging, capture leads, and make data-driven improvements. They help refine the MVP before investing more resources. Try Instapage or Strikingly, otherwise go with Webflow. - Product tools (for testing UX)
- We actually gave you 5 awesome ones of these already in the Builder’s Corner section of our last letter.
- Tools to study and analyze
- To cross-reference your user feedback with actual data, analytics tools give you data-driven insights into user behaviour, preferences, and metrics. They enable informed decisions, identify user needs, and validate hypotheses. So check out Google Analytics or popular alternatives like Matomo and Hotjar.
- MVP launch tools
- The trickiest part for most. How to get people to actually use and engage with your product. We previously gave you some top tips like selling as a service before going SaaS and the ads-test method for getting pilot users. But if you’re looking to reach an audience you could try Reddit’s r/startups community, list on Product Hunt or BetaList.
Need more tools? Remember, if you share The Open Letter with friends, you get our 50 Founder’s Tools list and our 25 AI Tools for Startups list, too.
Want more lists or free how-to docs to download? Hit reply and let us know what you’re after…
THE THREAD
Is Agritech the new FinTech for millennials? According to our latest guest, Zamokuhle Thwala from AgriKool, there are massive opportunities available for young farmers in South Africa.
Enjoy this fascinating conversation with a rising star in the South African startup scene. And don’t forget to like and subscribe so you don’t miss an episode.
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THE RESULTS
Earlier this week, we asked if your degree is worth the paper it’s printed on. And we’re tied between a yes because it instils work ethic and a no because it was just a party. So there you go.
🟨🟨🟨🟨🟨⬜️ 🤓 Yes learnt a lot and have used it at work. (23%)
🟩🟩🟩🟩🟩🟩 💼 Yes it’s an important part of developing work ethic. (27%)
🟩🟩🟩🟩🟩🟩 🥳 No but it was worth it for the party. (27%)
🟨🟨🟨🟨⬜️⬜️ 🏎️ No I’m doing something different to what I studied. (19%)
⬜️⬜️⬜️⬜️⬜️⬜️ ⏳ No it’s a waste of time. (4%)
REACH OUT
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