Reach Africa’s Sales Director Leslie Adams on Incremental Purchasing and its Impact on the African Economy
In a bustling Johannesburg township, a unique entrepreneur is making waves with his innovative business model.
Miles Kubheka, the founder of ‘Gcwalisa’, runs a retail outlet housed in a shipping container. The store offers essential goods like maize and sugar in bulk dispensers, allowing customers to purchase only the amount they need. Kubheka sources his products at wholesale prices, passing on the savings to his customers who would otherwise pay a hefty markup at local stores.
According to Kubheka, the concept behind ‘Gcwalisa’ is to address the issue of overpricing at smaller retailers, particularly in low-income areas. He believes that many consumers are not poor but rather poorly paid, and by offering bulk goods at affordable prices, he aims to alleviate the financial burden on his community.
Understanding Incremental Purchasing in the African Context
Incremental purchasing, as exemplified by Kubheka’s business, involves paying for goods or services bit by bit or as needed. This concept is not new in Africa, with lay-by being a traditional method of payment in many communities.
With a significant portion of the African population facing financial constraints and limited access to banking services, incremental purchasing has gained popularity as a practical and cost-effective way of meeting consumer needs. The flexibility and affordability of this approach make it a preferred choice for many African consumers.
Adapting to the Pay-As-You-Go Trend
The pay-as-you-go model, popularized by telecommunications companies, has revolutionized the way products and services are consumed in Africa. From mobile phone services to financial products, businesses are embracing flexible payment options to cater to the diverse needs of the African market.
For instance, a South African financial services startup has tailored its payment plans to accommodate the irregular income streams of its informal economy clients. This innovative approach not only promotes financial inclusion but also ensures that customers can adjust their cover levels based on their financial capacity.
In the streaming industry, platforms like Viu South Africa have introduced pay-as-you-go subscriptions to cater to cash-conscious viewers. By offering daily, weekly, and ad-supported viewing options, Viu has tapped into the preferences of mobile-first consumers who value flexibility and affordability.
Embracing Innovation, the African Way
As African businesses recognize the importance of adapting to local consumer behaviors and preferences, the pay-as-you-go model continues to gain traction across various industries. By aligning their offerings with the unique needs of African consumers, companies can drive growth and foster greater financial inclusion.
Ultimately, the shift towards incremental purchasing and pay-as-you-go models signifies a new era of innovation and inclusivity in African business, paving the way for more accessible and sustainable economic growth.
