Shopping mall development in the townships is about to undergo a revival – thanks to Richard Maponya, reports Charlene Smith
Shopping mall developments have, in the past, failed in townships because they were targeted at a race group rather than people, says township retail guru Richard Maponya.
That is set to change, he believes.
In May, the Maponya Group will, with Wooltru, begin building a huge R170-million shopping centre in Soweto.
The shopping centre, to cover 40E000m2 – around the size of Eastgate Mall – will open its doors toward the end of 1999 in Pimville.
Situated on a 25ha triangle of ground, it is on the Old Potch road, one of the primary arterials into Soweto, and is close to the Baragwanath taxi ranks, and a rail station.
It is already almost completely let with stores that include Woolworths, Checkers, OK Bazaars and Edgars. Maponya says it will also accommodate “eight to 10 cinemas, and a limited number of office premises”.
Maponya first began business in the early 1950s delivering milk to households in Soweto. He survived endless barriers constructed by the apartheid government to prevent black people owning and running businesses in white South Africa.
He has survived endless hardships to retain the millions he has earned as the baron of retail management in Soweto. He says that shopping centres which were opened in townships in the 1990s, with the removal of government-imposed trading restrictions, fa iled because they were targeted “at a black market. People are people.
“The differences that are important in retail are the socio-economic circumstances of shoppers. The Dobsonville shopping centre, as an example, is quiet, because the stores carry a limited range of stock. People say we’d rather take our taxi and go to th e city or suburban shopping centres where we will have greater choice.”
Probably no one has Maponya’s range and years of experience with township retail, and it has certainly been an ongoing slog.
He built the first bottle stores in Soweto in the early 1980s after the government began removing restrictions on the consumption of alcohol by black people when it was forced to sell its bottle stores, which were the only ones allowed in townships. As a result, they came under concerted attack by political activists in 1976 and 1977 who not only burnt them but imposed boycotts.
Maponya now owns four bottle stores, which, he says, are doing miserable business along with the entire liquor retail industry, which is in the doldrums.
He attacks the existing system which allows beer and liquor manufacturers to act as distribution agents too. “They have cut out the middlemen and limited the potential for smaller outlets to negotiate prices. No one can compete – not the shebeen owners, not the bottle store outlets, no one. Our margins are squeezed too tightly.”
He says manufacturers selling direct to consumers, and acting as distributors, have cut profits for township bottle stores and large shebeens by around 60%.
“The government has said it will introduce legislation to stop these monopolistic practices, but while we wait, traders are going out of business.”
He opened the first supermarket in Soweto, across from Dube station and now owns two supermarkets, both of which are in the process of being revamped to become part of the Spar franchise group.
Maponya says that violence between hostel dwellers and residents in the run-up to the 1994 elections had a devastating impact on business.
“My stores were doing turnover of around R2-million a month each before the violence, and plummeted to around R500E000 a month during unrest, and have marginally lifted to around R600E000 to R700E000 a month now.”
Maponya opened the first petrol station in Soweto in Meadowlands in the early 1970s, and not long after was awarded the first General Motors franchise in Soweto.
However, that bit the dust with the pressure of sanctions forcing General Motors to pull out of South Africa. Maponya then began a BMW franchise which fell away as inflation rose and household incomes in Soweto came under pressure.
But, Maponya says it is becoming easier to do business in Soweto and other townships because of greater political stability and better and more visible policing. “At one stage delivery vehicles were regularly hijacked, but that rarely seems to happen any more.”
Maponya, who has also applied for a casino licence in Soweto, believes the potential of township retail has yet to be touched. “I still say it is virgin land – there is a lot of development potential depending on attitudes of those who want to enter that market.”