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Tech start-up targets township economy with e-commerce drive

Read time 3min 30sec
TDM township distribution agents.
TDM township distribution agents.

Tech start-up Township Distribution Model (TDM) has implemented a township economic renewal programme, anchored on the digital economy, particularly e-commerce.

The company says townships across the country need a strong technology ecosystem that will revitalise local economies and create employment.

Ismail Sadek, TDM co-founder and chairman, says the company has developed a sustainable business model for township entrepreneurs by utilising technology and e-commerce to create supply and demand levers that promote job creation.

Sadek, who is also an executive director of Milpark Business School, tells ITWeb that increased adoption of e-commerce in townships will lead to greater productivity, innovation and employment across SA.

There has been a big increase in e-commerce activity in SA, as consumers avoid physical stores during the pandemic. For many companies, townships are the frontier to grow their e-commerce businesses.

TDM has recruited hundreds of youth as agents in townships across South Africa. These agents, equipped with Android tablets and data, visit households and businesses to assist people with online shopping.

The company also created an e-commerce ecosystem of more than 10 000 spaza shops and township manufacturers, to bolster its programme.

“Township businesses and households are adapting to e-commerce as a channel for shopping for goods and services, and through its on the ground and delivery agent network, TDM is creating the quintessential last mile into SA townships,” says Sadek.

“We currently directly employ 400 people across 26 townships nationally and we are increasing this number to 1 000 agents in 52 townships by the end of 2021 (10 000 agents / entrepreneurs is our target over the next three to five years).

“For every township activity, we build an ecosystem that creates demand and supply channels. It’s a critical feature to keep the circulation of cash within the townships, which directly creates the economy for job creation.

Digital helping hand

“By introducing businesses and households to assisted online shopping, which is a migratory step to them doing it on their own, we are bringing direct cost benefits and the convenience of delivery to their doorsteps.

“Our agents are also equipped with delivery bicycles and/or vehicles to deliver directly to our customers. We are bringing a shopping convenience and experience never experienced by most township residents and businesses. Our TDM shopping app also enables users living outside townships to now purchase goods and services for family and friends in townships.

“As we expand our network and reach, this service will become more readily available across SA. As this grows, so does our network of agents and entrepreneurs, who start building on what is already a vibrant township economy.”

Government has accelerated initiatives to boost township economies and curb the growing number of unemployed people in the country.

According to Sadek, through his company’s training programmes and technology solutions, it is helping create employment in the townships.

“We try to make an impact in township communities by using technology. We create employment, we build up businesses, we build up manufacturers and we organise businesses in the townships through technology. Technology is the common denominator in all our projects and the elixir for job creation,” he says.

“We teach our agents to actively seek out opportunity and to become entrepreneurs, who solve problems and create employment. Within our initial group of 400 agents, already, 100 have employed an additional person to assist them.

“We are also building model spaza shops by introducing technology into these spaza shops. We are providing spaza shops with a point-of-sale payment device, which allows township residents to pay electronically, draw cash from a spaza and even access grants directly from a local hub.

“This will activate spazas to become suppliers and the neighbourhood money market for goods and services. By increasing spaza shops’ revenue through technology and payment channels, it will also lead to increased job opportunities.”

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