Exploring factors which attribute to the success of foreign-owned spaza shops in Folweni township: South Africa.

Abstract

This qualitative study seeks to explore the factors which attribute to the success of foreign-owned spaza shops in the Folweni Township. Drawing from literature on South African spaza shops, personality traits theory and individual interviews, the study articulates the factors attributing to the success of foreign-owned spaza shops, their significance, and effects on South African Township communities and finally makes recommendations to assist municipalities and to equip locals in competing with their counterparts. Spaza shops provide employment and serve as means of survival to a sizable number of township residents. However, South Africans have observed the shift of spaza shop ownership and employment to foreigners. In addition to that, foreign-owned spaza shops seem to be very successful. According to Mathew (2015, p.2), foreigner spaza shop owners simply display more entrepreneurial flair than their local counterparts. This is evidenced by the findings of some studies conducted in Gauteng and Western Cape provinces and on-going conflicts between foreigners and locals in South African Townships. The study employed direct individual interviews to collect data from seven participants. Data was analysed utilising NVivo and thematic analysis. The study concluded that most spaza shops in the Folweni Township are operated by foreign nationals particularly from Ethiopia and Pakistan and that those foreign nationals are hard workers who employ creative and smart business ideas. Factors attributing to the success of foreign nationals include raising capital through networks, network stock procurement, unique business operations, product and service diversification, level of education and cheap labour. Foreigners play a critical role in the township economy as they provide goods and competent services to the door steps of residents. Although foreigners pay rent for the premises utilised as spaza shops, the study concluded that foreigners are the most economic beneficiaries. Furthermore, foreigners seem to be reluctant in employing locals and participating in business social responsibility.