Festive economy bolstered by stokvels and societies

Without these purchases, South Africa would experience a dull festive season; the retail sector would be in a depressive mood. Purchases range from canned stuff, toiletries to perishables. Some of these purchases happen in the major cities but are consumed at rural places far away such as Venda, Eastern Cape and KwaZulu-Natal.

Interesting facts

• Majority of stokvels and socieites are women based and run. According to research, women prefer other women as partners in these schemes.
  
• They are a main source of investment for most members because formal investment vehicles are not accessible or are considered suspiciously by members.
  
• Financial institutions are still perceived by them with suspicion hence the lack of anticipated support for accounts specifically designed for them.
  
• NASASA estimates the total worth of all stokvels and societies to be over R13 billion per annum.
  
• Many SMMEs are successful due to the financial support of these schemes. Members of loan schemes assist each other with starting new businesses.
  
• Burial societies not only benefit financial institutions such as banks and insurance companies, but retailers, wholesalers and funeral directors have been shown to depend highly on their existence.
  
• When members of a basic revolving scheme gather, food and alcohol are usually consumed. This usually happens once a month.
  
• Basic revolving schemes prefer small group members due to their annual rotations.
  
• Most find communications addressed at them patronising and lacking insights.
  
• Professional and executive members of society, i.e. those in middle to higher LSMs, are also members of their own schemes, albeit in a slight set-up. Their contributions are significantly higher as opposed to their smaller member numbers.

Since these schemes are accountable for a significant portion of our GDP and festive spending, companies need to appreciate their contribution and hence engage them. Festivities around this time centre on complete fun and celebrations with fellow scheme members and families. Retailers should consider complementing traditional communications such as those portraying the season through Western eyes, eg turkey and gammon dinners, with Afro-centric practices. The need for communications agencies and clients to create innovatively and compellingly messages is critical.