South African companies in all sectors have been pummelled by the economic effects of the pandemic. Many in the financial, manufacturing and mining sectors posted some of their worst results in recent history. The Business Impact Survey of the Covid-19 Pandemic in South Africa, released in April by Statistics South Africa, showed that most sectors had a lower turnover than usual.
But a handful of companies, especially in the tech, online services and logistics field, were able to weather the Covid-19 storm with a little bit of flair through innovative and sometimes crazy changes in how their businesses ran, while other people started new businesses.
Vusi Mkhabela, the owner of Black Rose, sold food at weekend markets and did catering. He lived without a salary for weeks because areas he works in closed at the beginning of the lockdown.
“I was stuck financially and mentally,” said Mkhabela — until he decided to cook from home and market it on social media during lockdown level four. Events and markets were still banned, but Minister of Trade and Industry Ebrahim Patel then allowed cooked meals to be sold and Mkhabela used this to get his business going again.
“I started cooking at home; we took pictures and fed our Instagram pages and WhatsApp,” he said.
People latched on to the opportunity to eat someone else’s food. As the lockdown restrictions eased, he got a catering job which enabled him to rent a space in Maboneng, Johannesburg, where he opened The Gourmet Shrine.
Davy Tsopo was one of the 2.2-million people StatsSA said had lost their jobs during the strict lockdown levels. Tsopo had been a cleaner.
He was stuck at home with his month-old baby and had nothing to do, so he binge-watched several television programmes. This was not in vain, because one show on DStv’s TLC channel, Cake Boss, did not only entertain him but sparked his interest in baking. He started making scones and muffins. Then a friend asked him to make a cake, and he posted it on social media. The social media post catapulted his business and now Cakey by Davy is thriving, with orders coming from around the country. He says he does not ever imagine looking for another job.
In August, while releasing crime stats, Police Minister Bheki Cele said that the period from 1 April to 30 June was a crime holiday as a result of the lockdown.
But Brian Bhebhe, the owner of Neosmart Communications, said that during levels four and three of the lockdown he saw an increase in the services his company offers — because people wanted to feel more secure in their homes.
This increased his revenue by at least 50%.
His company offers security services such as home automation, fingerprint systems and the installation of CCTV.
But now he is not making the kind of money he did during the harder lockdown levels. Bhebhe said this is because people are not spending money on luxurious security equipment, such as automating their homes, because money is tight.
Toshiba Tech, which sells printers and copy machines to businesses, had to diversify during the lockdown to keep their doors open. The company started Office Germs, which offers disinfections of printers and phones that don’t damage them. The company had already launched SanitizeMe, which offers sanitation and personal protective equipment (PPE), as well as fogging to disinfect surfaces.
SanitizeMe at level five of the lockdown was more of a cleaning service company which, during the storm of the pandemic, also had made a huge loss in income because most industries shut down, hence the creation of product offerings such as sanitation liquids and PPE, said Kingsley Chambers, the managing executive of Tobisha Tech.
“SanitizeMe has grown by over 300% based on new product offerings, which has allowed the main business to keep all its staff to date,” he said.
Launched in 2018, Rain, the data-only SIM card company, saw an increase in data usage because South Africans were restricted to their homes, including those still employed. This meant that people were spending most of their time online for social, entertainment and work purposes. This resulted in its customers using 30% more data each month than before the pandemic, according to Rain’s chief marketing officer, Khaya Dlanga.
“When lockdown started, it became apparent that South Africans needed affordable unlimited data, and Rain happened to be in a position to provide that kind of service,” he said.
Knitwear designer Laduma Ngxokolo said his company, MaXhosa Africa, had rented a space in the Mall of Africa in Midrand, which did not open for the most of the stricter lockdown levels.
Ngxokolo said the company decided to focus on their online store to ensure sales could be made. The company also created stylish masks, for fashion enthusiasts to wear with their outfits.
The online store not only reduced financial losses but “we would say we saw our [online] numbers double since the pandemic. The improvement has exponentially grown from last year, also based on buying patterns,” said Ngxokolo.
Khaya Ngcobo, the founder of the courier service Remit Logistics, said Covid-19 hit the business hard, especially during lockdown level five. But they put money into advertising their business to make money.
“We put out adverts predominantly on Facebook pages such as Brownsense” and also posted on Twitter, letting their followers know they were open for business.
The restrictions on movement meant their clients relied even more on their courier service. There was an uptick under lockdown level
four when some small businesses had to deliver “work from home” hardware to their employees and people had to send vital items to their family members, Ngcobo said. This resulted in a revenue increase of 25% to 40%.
“What [also] assisted a great deal as well was our current clients, who pivoted from their normal operations such [as] designing garments, to making cloth masks to get into the PPE space and we distributed their products in and around Gauteng.”
Veldskoen, which sells handcrafted shoes online and in other retailers such as Woolworths and Outdoor Warehouse, saw their revenue drop by more than 80% when level five lockdown hit, because the sale of wearable items was restricted.
In response the company decided to become an agency. This was possible because Veldskoen had launched a digital business three years before the pandemic and had the skills to make this move possible.
Another revenue stream was created through its Digital Online Retail Products. So far, the company has made a commercial for Sportsman’s Warehouse, which aired on television news broadcaster eNCA.
The agency made up 20% of the revenue lost by its footwear business.
Tshegofatso Mathe is an Adamela Trust business reporter at the M&G