Clicks Group Ltd. is expanding its presence in South Africa's township economy through KwaMakhi, a new brand aimed at shoppers who traditionally rely on informal retailers. The debut store opened in Tembisa, a community historically shaped by apartheid policies, with CEO Bertina Engelbrecht emphasizing affordability, product quality, and accessibility as key selling points.
The name KwaMakhi, meaning "at my neighbor's" in several South African languages, reflects the store's goal of becoming a convenient local hub. Engelbrecht likened the concept to borrowing everyday items from someone nearby, with the outlets stocking essentials in compact 280-350 square meter spaces - smaller than standard Clicks pharmacies. The township retail sector generates approximately 900 billion rand ($56 billion) yearly, according to the company.
Engelbrecht highlighted a paradox where lower-income shoppers often face higher costs globally. "You would think it should be the reverse," she said. To address this, KwaMakhi will adopt everyday-low pricing and sell smaller portions for customers with limited cash flow.
Private-label goods will make up 30% of inventory initially, possibly rising to 40%. Plans include launching refill stations for personal-care products by October.
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Clicks identifies around 2,000 neighborhoods where its mainstream stores aren't viable but KwaMakhi could thrive. The 30 million rand pilot includes monitoring performance through February.
Previous efforts to cater to budget-conscious shoppers as a monolithic group have yielded lessons, Engelbrecht noted. KwaMakhi will tailor offerings to specific communities based on real-time sales data.
While informal traders benefit from lower operating costs, Engelbrecht pointed to consistent demand among lower-income buyers. For Clicks, the initiative is a strategic move to capture value in a market where price and proximity drive decisions.
South Africa's townships, home to millions, have long been underserved by formal retailers despite their economic significance. Informal vendors dominate these markets by offering proximity and flexible pricing but often lack consistent product quality or scalability. Clicks' entry with KwaMakhi aims to combine the convenience of informal trade with the reliability of a national chain, leveraging its supply chain to keep costs competitive. The 900 billion rand township retail market represents a major opportunity for formal players willing to adapt to local preferences and spending patterns.