Abstract
Background: Coopetition is a powerful means by which microenterprises can compete against large firms in low margin sectors, such as the small retail outlets in South African townships, known locally as spaza shops. Although coopetition is widely used by foreign nationals who own and manage such shops, and who are reported to be more successful, South African owners have failed to establish such relationships. Objectives: The objective of this study was to explore the reasons why South African owners do not form such relationships Method: The study used a qualitative, exploratory approach. Results: An absence of trust and a general lack of awareness of the potential benefits of coopetition are the major barriers. Moreover, the volatile environment within which these spaza shops operate, characterised by extensive unemployment and high crime rates, and makes the establishment of coopetitive relationships more difficult. Conclusion: Any intervention designed to improve the survival rate of spaza shops should include measures to address issues of trust and the benefits of coopetitive relationships.
Highlights
Microenterprises, and small convenience stores, known locally as spaza shops, are a key part of the economy within low-income communities in South Africa, providing a range of services to such communities (Chebelyon-Dalizu, Garbowitz, Hause & Thomas, 2010; Liedeman, Charman, Piper & Petersen, 2013) and dominating the retail landscape in townships across the country (Fatoki & Oni, 2016)
At the outset of this discussion, it is important to state that the current socio-economic environment in the South African townships, which is characterised by extensive unemployment, high crime rates and wavering social cohesion, is the dominant and overriding context for this study, shaping its importance, its rationale and its relevance
This study offers perspectives on the possible reasons for the commercial failure of South African-owned spaza shops but must not be interpreted as conferring responsibility solely on the owners, who in many respects are unable to exercise their capacity for agency, which is so central to entrepreneurship, and are instead trapped in a highly constrained and contested environment
Summary
Microenterprises, and small convenience stores, known locally as spaza shops, are a key part of the economy within low-income communities in South Africa, providing a range of services to such communities (Chebelyon-Dalizu, Garbowitz, Hause & Thomas, 2010; Liedeman, Charman, Piper & Petersen, 2013) and dominating the retail landscape in townships across the country (Fatoki & Oni, 2016). Spaza shops play an important socio-economic role by creating employment, making credit available to their customers and building economic activity in areas where few such opportunities exist (Ballantine, Rousseau & Venter, 2008; Friedland, Merz & Van Rensburg, 2008; Roos, Ruthven, Lombard & McLachlan, 2013). The businesses, if they are profitable, provide financial support for the owners, their immediate family, their extended families and, often, numerous other poor people within the wider community (Liedeman et al, 2013). Research reports that somewhere between 65% and 75% of South African SMMEs do not become established firms (Fatoki & Odeyemi, 2010; Grundling & Kaseke, 2010)
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