Good ideas aren’t ‘good’ because someone said they are. What makes them good is the immense benefit they provide to a large group of people. In the case of Kasi Konnect, it serves the large, often overlooked, sector of the economy that is expected to function within the formal guidelines of what a business should be, rather than acknowledge what this actually is. Because that is what the informal economy is: a vibrant ecosystem that operates distinctively differently from what the dictionary says ‘formal trade’ is.
“I’ve been an entrepreneur for 43 years, and I had a brand marketing agency for 21 years,” Janice Scheckter, Founder and CEO of Kasi Konnect, recalls. This has uniquely positioned her to understand the needs of brands while identifying the gaps that tend to form within an industry.
Birth of a Platform
The platform technology bug bit Janice Scheckter many years ago. It paved the way for building Kasi Konnect, the online platform that connects kasipreneurs, and today it continues to grow into various avenues – all to support the entrepreneurs in the township economy.
“I got into platform technology, and at the time, when you said the word ‘platform’ in South Africa, people used to think it was either a raised surface like a stage, or akin to Facebook or Twitter. These technologies were still young, and our lives weren’t so platform-oriented. Today, everything we do is on a platform.”
She points to all aspects of our lives. Google or OneDrive might keep our work lives together, ruled by a platform like Monday.com, or even Teams. We go home to Netflix and chill or any streaming platform of our choice. Leisure time means scrolling through ‘insert your favourite social media here’, or vibing to sounds from any of the major three music streaming platforms. Even buying groceries and commuting from one place to another has a variety of platforms to service these needs.
“If you have a profile, it’s a platform,” she declares. “All of these are platform technologies, but [back then] I was quite taken with platform tech, and I loved what platforms could do in the South African environment.
“It was a hard sell and a long learning journey for me, because as the landscape changed, I had to ask what I was building. Was I building a business that was like a LinkedIn or a Facebook, or something different?”
Fast forward to 2022 – and a lot of expensive school fees later – Kasi Konnect was born. “I saw that township entrepreneurs don’t have an ecosystem.” She elaborates that as a township entrepreneur, your life is most likely not very digital because bandwidth is expensive, devices are probably a bit outdated, and you are on the hustle. “Your time isn’t spent networking on LinkedIn; it’s spent working and putting food on the table,” she says.
What makes it even more difficult to build this ecosystem on your own is that this sector is distinctly different from the formal economy. “You don’t have an ‘in’ at a bank with someone who can introduce you to a relationship banker. You might not have someone who can say here’s a great township business, go speak to them, or you know, my uncle started five businesses, speak to him. This doesn’t exist,” Scheckter states.
She poses another question that was key in identifying the solutions that were lacking in the kasi ecosystem: “How do you get funding for your business when it’s not registered with CIPC – something that a small township business starting out might not be ready to do. That leaves the business owner to go knock on the door of SEDFA or NYDA.
“I believed that could create that digital ecosystem in a way that connects people and allows township entrepreneurs to support each other and reach opportunities.
“Currently, we are the only directory of Kasi businesses.”
Beyond Listings, Spaza Supply+ Grows
Since its inception, Kasi Konnect has grown immensely. Not just in team members, but into a large network with different elements.
“Kasi Konnect looks like a LinkedIn. You can search for either an entrepreneur, a business name or type.”
Scheckter explains that this is done by using geolocation for each business and multiple keywords to essentially create a business profile that can become a primary website for a kasipreneur.
But Kasi Konnect is much more than a directory. It offers two other solutions, too. Spaza Supply+ and Crowdfunding.
Spaza Supply+
Spaza Supply+ aims to solve one of the townships’ biggest problems: The kasi economy doesn’t grow as it should.
“A lot of money moves through the kasi… Some people quote R900 billion, others R1,25 trillion, but the problem is that money doesn’t circulate.”
She poses this example:
Once a shopper walks into Cosmo Mall, the money leaves the township simply because there are no township entrepreneurs who have businesses in the mall. What you want instead is the LM3 model.
TIP: Local Multiplier 3 (LM3) is a way to measure the circulation of money, noting that a set number of cash needs to circulate across three ‘rounds’ of spending if it is going to effectively grow economies. You can use the example of a R50 note. The more times a single note is moved in its spending journey in a certain geographical area, the bigger impact it will have. Person A receives his paycheck from his job in the city. He travels back to his home in the township, where he spends the day at the spaza shop. Ideally, with the supplier programme that Scheckter and her team are building, the spaza shop owner (Person B) spends her money buying locally produced goods for her shop. In that transaction, the R50 lands in the cash register of the kasipreneur, who is a maize meal manufacturer (Person C). He, in turn, uses the R50 to pay his supplier, who makes the packaging materials for his maize meal.
The longer a chain of local people can be created to keep money moving within an area, the higher the circulation rate, and the stronger that area’s economy.
“Circulation in the townships is at 1,25 to 1,75, where you want it to be above 2,5,” she clarifies. “Spaza Supply+ takes the kasi-based manufacturer, whether you are making achaar, soap, jam or a lotion, and helps them get onto a kasi-owned shelf to ultimately build a 100% kasi-owned supply chain.
Scheckter explains that the kasi-owned shelf is also imperative here: not only is the supply chain drawing on local talent and supply, but it is keeping money in the shops that are a part of the community it serves. It also relies on local, kasi-born logistics and last-mile delivery service providers to truly make this work.
“We are already piloting this in Soweto. We’ve created a catalogue with a bunch of manufacturers’ products where the sales representatives can go to the shop and say here are some products that we would like you to consider. It professionally outlines the manufacturer trade price and the recommended trade price, allowing the shop owner to make an informed decision.”
Pilot Accellorator Programme
However, Scheckter realises that there is still a massive challenge. “We have a whole lot waiting to be added to the catalogue, but they are not compliant. They haven’t done their SABS testing, and they don’t have a barcode or expiry date. That’s why we identified key stakeholders that focus on the township economy, compliance and standards, and the upliftment of local businesses. This is the collaboration between us, SEDFA, SABS and Proudly SA.”
Currently, this project is being piloted as well. “It will see the acceleration of compliance testing and funding of these waitlisted products to get them onto shelves quicker. We also identified the manufacturer’s constraints with scaling fast enough to serve this market. Thus, the programme will focus on accelerating ten businesses for shelf-readiness, and ten businesses for manufacturing capacity – That’s how we believe you build the kasi economy.”
Crowdfunding
Another element of Kasi Konnect is that it brings crowdfunding to kasipreneurs. “Whether you are formal or informal isn’t important to be crowdfunded on our platform. We recognise that you need to access funding to build a brand or to formalise, so we support the informal sector in that way. The only requirement is that you are geo-located in the township.”
Building an Industry Wrought with Emotion
Scheckter explains that the township communities approach the economy differently from other communities in South Africa. “They understand and support buying local,” she emphasises. “If you explain to one of these individuals that supporting a local business will lead to one job being created every six months, hypothetically, of course, it’s meaningful to them.
“60% of unemployed South Africans are living in townships, so joblessness is deeply painful to these individuals. But they support creating jobs in these communities.”
Scheckter notes that supporting and growing these communities not only means food manufacturers and well-known businesses. It means expanding tourism, building niche businesses like ice cream shops or shining the light on the creative economy: the creators who call these townshops their homes.
Kasi Konnect is a platform that is underpinned by innovative technology, but more importantly, it aims to solve real concerns, resulting in growth for a sector of the South African economy that is severely underestimated.
