Kweza: Unlocking Value for Informal Retailers in South Africa

South Africa –

Running a small business can be challenging especially so in the informal sector where segments of a single value chain are fragmented. Informal retailers often pay a premium for their products and delivery due to limited visibility to the best pricing in the market and low buying power. 

Founded in 2019, Kweza, has developed an e-commerce supply chain management platform to respond to a pain point which is highly prevalent in South Africa’s informal retail sector.

Known as spaza shops in South Africa, the informal retail sector plays a critical role in local food security, self-employment and community cohesion. They are regarded as a pillar of South Africa’s township economy and job creation.

According to a report by The Independent newspaper, “in terms of South African grocery retail, as much as 40 percent of total food bought by consumers each year is from informal traders such as hawkers, small and larger spaza shops and midi wholesale traders, who service 77 percent of the population.”

Kweza is currently tapping into this significant untapped opportunity by leveraging technology to improve the supply chain that services informal retailers. The startup brings the power of collective buying to spaza shops, ensuring they can stock conveniently, at the best prices and have goods delivered directly to their stores. 

Ropafadzo Musvaire, Kweza’s CEO and co-Founder (left)

Retailers that sign up to the Kweza platform gain visibility to the best pricing on the market and insights on inventory spend and order patterns.

“Retailers gain access to higher savings and better margins each time they order via the mobile app. We provide convenience to retailers to do what they can do best, that is to serve their customers fully,” said Ropafadzo Musvaire, Kweza’s CEO and co-Founder

Musvaire said that Kweza’s business solution is designed around the needs of retailers, and the start-up is constantly working to meet their customers’ needs. With over two years’ experience in developing the innovative solution, Musvaire said her team is determined to challenge the status quo.

A Kweza customer gets acquainted with the trading platform

In May 2021, ShEquity Africa invested in Kweza towards growing and scaling up the Company’s business model.

“We are delighted to have invested in Kweza as well as supporting the team towards growing and scaling the business. Being a female co-led and co-owned impactful and scalable business run by a knowledgeable team, Kweza aligns well with our investment thesis. Kweza’s platform addresses key challenges faced by informal retailers in South Africa including those linked to the last-mile distribution. Informal sector accounts for 80.8% of jobs and it is the main source of employment and the backbone of economic activity in urban Africa. Thus, we look forward to working with the team to scale its solution to other African markets,” said Pauline Koelbl, Founder & Managing Partner of ShEquity.

The investment has proved key in bolstering Kweza’s ability to give retailers visibility to the best prices on the market, access to higher savings, the cheapest available pricing for their inventory.

“The last twenty months have been a learning journey, understanding the nuances of our market, validating the problem and refining the solution. Along the way, we have identified additional problems which create more opportunities for us. We have definitely managed to create value by providing an efficient and reliable delivery service and helping our customers make cost savings,” said Musvaire. She added that for Kweza, success is seeing the growth of their customers.

“We have witnessed some of our customers opening additional stores and expanding their product range. Initially coming into the market, we assumed that we would need a few months to integrate into the wholesalers and partner with them. This process was near impossible as they were not as optimistic about integrating technology into their legacy systems. We would have considered a shift to the warehousing model sooner.”

Through its custom technology, Kweza is helping to close the gap between traders and their customers’ needs.

Musvaire said that the most next important plan for Kweza is shifting their model to warehousing where the company will start distributing out of its own warehouse. She said once the warehouse is running smoothly, the team will refocus its effort in building a working capital product for their customers.

ENDS