Virtual distribution platform company Selpal gathers detailed data of retail shoppers’ habits from small retailers to provide manufacturers with granular insight into the shopping habits of their target audiences, says Selpal CEO Stephen Goldberg.

Selpal’s business model helps to guide foot traffic through small retailers’ doors, with consumers being provided with incentives for buying selected items at Selpal’s partner stores; manufacturers then buy the data detailing the consumers’ shopping trends and preferences, he explains.

“This will transform manufacturers’ understanding of end consumers at the lowest end of the market.”

Thus far, trustworthy data on the township retail sector has been scant, limiting strategic business decisions. This market segment is not well understood, despite being estimated to be worth billions of rands, says Goldberg.

In 2014, the World Bank found that about half of South Africa’s urban dwellers live in townships and informal settlements within and around the country’s major cities.

The study by the World Bank found that the informal settlement Diepsloot, northwest of Johannesburg, and home to more than 200 000 people, had a R2-billion economy that was mainly spent in the surrounding suburbs of Sandton and Fourways.

Soweto, estimated to have more than two-million people, has consumer spending power of as much as R5-billion, according to First National Bank, emphasises Goldberg.

“However, beyond these broad numbers, no one accurately understands the buyers who frequent the country’s more than 100 000 spaza shops.”

Data is gathered through bespoke mobile applications on merchant and consumer devices. Selpal is building a dynamic database that profiles shoppers who live in the townships and informal settlements, estimated by the World Bank to constitute as much as 38% of the country’s working-age citizens.

“The Selpal solution provides the first definitive link between manufacturers, township merchants and consumers. It also gives merchants incentives to use a virtual platform to cut costs and boost the transparency of the supply chain,” says Goldberg.

Meanwhile, the platform also offers a loyalty programme. Consumers’ mobile wallets are automatically topped up with credit whenever they buy everyday products. Selpal provides them with, for example, access to prepaid airtime for all networks and prepaid electricity, and also enables them to pay digital satellite television accounts as well as buy gaming products.

For merchants, the platform offers a range of data on stock and the ability to place orders online. Additionally, because some merchants do not have bank accounts, Selpal allows for online purchases and cash management without the need for bank accounts through its Vault Wallet, which is also a source of revenue for the merchant, he explains.

“The aim is to transform the retail value chain by enhancing the ability of merchants in the informal sector to run successful businesses, while making the acquisition of basic necessities easier and more affordable.’’