Mobile meal delivery: Freddy McHumaine, CEO of KasiD Delivery, and Lucky Mazibuko of Ribs Circle restaurant in Tembis are upbeat about the meal delivery business in the township. (Delwyn Verasamy/M&G)
and othersUkkie Mazibuko has run Ribs Circle, a family-style fast-food restaurant in Tembisa since 2016. The restaurant is one of many semi-formal eateries in the area, eastern Johannesburg, that has turned to e-commerce to grow its business.
Before the arrival of local e-commerce delivery app KasiD, Mazibuko's customers would either call to pick up their food or sit down in a restaurant to eat.
In the two years since registering his business on the app in 2022, his revenue has increased by about R25,000.
Mazibuko said the town needed e-commerce because it boosted the local economy. “It helps. It brings in extra income.”
KasiD is an online food delivery service born out of the need to serve the residents of Tembisa. Chief executive officer Freddy Mahumaine said he started the service because he wanted to eat local food even after leaving the town.
“When I was doing my research, I saw big companies like Uber and Mr D leaving the township and I felt there was a big void.
“They said their main concern was safety, crime and things like that. I grew up here and somehow I always felt safer in town. I always felt safer here than in the suburbs and I thought there must be a way to solve the safety issues,” he said.
KasiD started as a food delivery business with just 10 drivers in 2022. McHumaine gradually expanded the business into logistics and last-mile fulfillment, and now has 60 drivers.
According to the 2023 Township CX Report published by digital marketing company RogerWilco, the township's e-commerce economy is growing, with the majority of respondents (60%) saying they or someone they know has sold a product or service online or started working online.
Additionally, 20% of respondents said they would consider Uber Eats for grocery delivery, followed by Checkers Sixty60 at 19.7% and Mr D at 19.3%, while Pick n Pay's ASAP service attracted the attention of 10%.
Shoprite this week announced it would be entering e-commerce for the first time with its cash-and-carry stores and launch a bulk delivery service for spaza shops and small businesses. The online shopping system will offer free delivery to customers within a 50km radius.
Mark Cotton, head of B2B e-commerce at Shoprite, said the initiative would help small businesses by “providing innovative solutions to the specific problems they face”, including rising transport and fuel costs and the difficulty of meeting demand in the informal sector.
Takelot.com, which owns Mr D, also saw an opportunity in this sector and has launched six different programs aimed at entrepreneurs and township communities.
Take-a-lot's head of external relations and public policy, Tshepo Malumure, said the initiatives were aimed at encouraging people to spend money at businesses where they live and work, as well as getting more young people to join delivery services.
“An element of it is also about development, getting more young South Africans to become drivers. There needs to be a change in mindset so that more South Africans can see it as an attractive proposition, something that they want. And that is part of what we are doing as part of the township economy to enable more young people to take advantage of these employment opportunities and income generating opportunities,” he said.
One of the initiatives Take-A-Lot is rolling out in the township is a personal shopper program, where they shop on behalf of community members.
The other is the Mzansi Trailblazer Restaurant Programme, which gives trade benefits to independent restaurants run by disadvantaged entrepreneurs to boost sales on the Mr D platform.
But the RogerWilco report noted that while major e-commerce companies are investing to increase their presence in townships, these areas have different needs than more affluent suburbs.
Township delivery services such as KasiD and Order Kasi in Cape Town and Delivery Ka Speed in Hammanskraal say they have been developed to meet these needs.
According to development economist Eddie Lacabe, township economies are large but have low incomes, which makes it difficult to operate a business. “The emergence of this e-commerce market is still very small, and that's because the income levels are low…” [also] “I think it's because the culture in the market is not necessarily inclined to do things online yet,” he said.
“This is a cash economy, so people prefer to shop in brick-and-mortar stores. Also, the town is concentrated, so there are proximity issues.”
“People will generally be closer to markets. They will be closer to stores where they can buy whatever they want, instead of ordering online.”
Lacabe said diversifying its offerings would help attract more customers.
“The target market is traditionally based around food, grocery stores and, to a limited extent, hardware stores, all of that kind of stuff. So, it's really within the food industry where I see opportunity.”
However, he said there are limitations on informal food businesses operating in the township as there are additional requirements they must meet to be listed on most established delivery platforms such as Mr D and Uber Eats.
Local delivery services have recognised this gap and have capitalised on it by registering local formal and informal businesses on platforms such as KasiD.
“Early on, I knew that I wanted to compete with the big players like Mr. D and Uber Eats, so I made sure to leverage some of the unique aspects of the technology that we have in our app and design technology to be at that level or even better,” Mahmane said.
To address the town's safety issues, he decided to hire residents.
“My main focus was to hire local people. That was the first strategy. And by local I don't just mean South Africans, I also mean people who reside in the same area because when we were doing our research we realised that every settlement has a different culture, different language, different food, different behaviour, different hotspots and if people don't understand the hotspots they become an easy target,” Machman said.
“We also had a strategy for the name: 'Let's find a name that many people can relate to,' and we chose KasiD.”
Mazibuko said they would be welcoming big names like Mr D into the town's economy to bring in more business.
“It’s a competition. [KasiD] “I'm not going out of business, but for me, as long as I get customers, that's good. That's the business.”
