Township entrepreneurship isn’t a side story in South Africa, it’s a massive economy hiding in plain sight. There are an estimated 150,000 to 200,000 spaza shops across the country, and together with street vendors, hawkers, and tuck shops they make up a township sector valued at close to R900 billion, according to a 27four report. Spaza shops alone are believed to contribute around 5.2 percent to national GDP and support roughly 2.6 million jobs. More than 70 percent of South African households buy from informal traders, and shoppers visit their local spaza around four times a week, far more often than they visit a supermarket. This isn’t informal in the sense of small or marginal. It’s informal in the sense of unregulated and undercounted.
What makes the sector remarkable is how self-sustaining it is, built almost entirely without institutional support. Owners navigate red tape, permit delays, and security risks with little formal training, relying on instinct and community trust instead. The informal sector has grown at a compound annual rate of over 14 percent in the last five years, even as parts of the formal retail sector have stagnated, and that growth has drawn in some of the country’s biggest listed companies. Tiger Brands has partnered with over 71,000 spaza stores as part of a route-to-market strategy targeting 130,000 stores within five years, while Shoprite has used its Usave and Usave eKasi formats to compete directly with spaza shops on price in underserved communities. Township entrepreneurs built this economy out of necessity during apartheid, when formal business ownership was restricted for black South Africans. Decades later, it’s still standing on its own, and now everyone else wants in.