#RAPT BizTrendsTV | Mongezi Mtati: Local is better
This is significant as one of the biggest findings of the recently released Township CX Report is that the eateries and experiences in a township that do not advertise are the biggest in that township and are preferred to fast food franchises.
This episode of RAPT BizTrendsTV discusses this and some of the key findings of the report with RogerWilco's senior brand strategist, Mongezi Mtati.
“The report gives insights into how township residents interact with brands and how brands are engaging with township residents,” he explains.
What came out of the report is that when people are familiar with a township, they will buy their fast food at a place in the township.
“But when they move from there, they are more likely to buy from a franchise or branded experience because they know what to expect from them.
“KFC and Chicken Licken are trusted in this regard, but when we ask about local township experiences, the one they trust is their local Shisanyama,” explains Mtati.
Digital Word of Mouth
This year’s report is titled Breaking Boundaries and refers to economic boundaries.
People are having to make do with less, buying more with less money, and so they are finding creative ways of sharing deals using social media platforms like TikTok and Facebook.
This is overcoming boundaries of information through digital word of mouth.
TikTok is used largely to share experiences, food experiences and videos from township to township, or at least between townships. In contrast, Facebook and WhatsApp are used to share deals and discounts.
Being visible
However, he points out that if you are invisible on the ground in the township, the likelihood of being in these conversations is limited.
What is on the shelf in the township is what is being spoken about there.
“The more we see something, the more likely we are to talk about it. So, that's where you can pay the money to be visible. When you are visible, you can make yourself part of the conversation.”
Brands need to ask what happens when people are experiencing economic constraints and how they, as a brand, fit in. While people are looking for better deals, brands cannot always discount.
“What they can do is show that they are loyal to the community. Brands need to find ways to be present even in tough times,” he says.
He adds that although it’s been a bit slow, brands are entering this space by organically becoming part of the conversation.
Financial brands
This trend is not limited to food products.
In fact, the biggest chapter in this year's report is on money - savings, stokvels, loans, banking, payments, and more.
Most people have funeral insurance but not life or medical aid in the township market.
This insurance is also with the local funeral parlour rather than an established brand.
Another big takeout here is that while 91% of respondents have a bank account, none of them use it. They do not trust the banks and feel that banks do not understand them much.
So, they withdraw their money and use cash. The bank is only a convenient way to receive their money. They do not use it to transact.
“What we are seeing here is that community trust matters. Financial brands need to ask what they need to do to build trust so that people use their products."
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The issue of trust
Last year’s incidents of poisoning and the tragic death of some children led to government intervention and a spaza fund.
These incidents saw trust tarnished between the shop owners and the customers, as well as brands.
“However, the drive to register spaza shops that followed this has led to report respondents saying that they trust spaza shops more after registration,” says Mtati.
“Despite the poisoning of people as a result of buying products in a spaza shop, people still trust the owner, the person they have always bought from and who lives in their neighbourhood.”
There is no township
Mtati explains that for the report purposes, we talk about the township, but if you are trying to understand the township market, you need to understand that townships are not monolithic. They differ from township to township depending on location, age and gender, etc.
This is why, he says, this market is not going to evolve in ways we expect it to.
“Different communities and different individuals interact and engage with digital platforms and the digital world differently.
“What is for sure is that brands will need to constantly find ways and inroads to redefine themselves within digital platforms, because that's where the townships are seeing the most benefit.”
RAPT BizTrendsTV
BizTrendsTV is a collaboration between Bizcommunity, Rapt Creative and The Real-Networks consortium, and the first-of-its-kind trend show focusing on global topics impacting future socio-economic trends from a uniquely Afrocentric perspective.
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A new episode is available on the last Tuesday of every month at 8 am on Bizcommunity’s official website and via The Real Network digital platforms.
