📦 More SA Products Overseas….

Meet your maker? A couple of YouTubers took it upon themselves to build a working “stillsuit” from the Dune movies, i.e. a suit that recycles your body’s water to prevent dehydration in desert conditions. And, yes, they do recycle and drink their own sweat (safely?).

In this Open Letter:

• Backtrack: Reversing SA’s R100bn e-commerce pipeline.

• Tax Freedom Day, bye-bye BritBox and Hustlers wanted.

• The framework: How to pick the ideal niche for your startup.

• Your ideal crime-fighting tech: The results are in.

• Win R1k Takealot voucher: Check Friday’s email for a chance to win a R1k Takealot voucher & The First Kudu!

In partnership with

TRENDING NOW

Reversing SA’s R100bn E-Commerce Pipeline

By now it's common knowledge that e-commerce is heating up in South Africa. 

Triggered likely by the widespread adoption of grocery delivery services during Covid, it spread out to other industries and contributed to some R71 billion in sales last year, representing a 29% growth year-on-year.

A recap of the 2024 heat:

• In January, Temu started delivering in SA.

• In May, Amazon.co.za launched.

• A week later, Takealot launched unlimited delivery subscriptions & same-day delivery.

• Now, Checkers Sixty60 started beta-testing same-day delivery on larger items last week.

At the current growth rate, World Wide Worx predicts that by 2025, online would represent 10% of all SA retail (that’s ±R100 billion)… so it makes sense for everyone to play hard there. 

But these players mostly deliver on a supply chain that goes from somewhere in the East (likely China, Vietnam or South Korea) to a consumer in a metro in South Africa. 

But what about the other way round?

Catching up with the rest of the world

SA’s been slow to the e-commerce party. In countries like the United Kingdom, e-commerce is 26.9% of their total retail – an estimated R2.6 trillion per year. It’s therefore not too far of a stretch to think that when the 100k-odd Europeans that hit our shores each year return home, they’d like to get some of those good-old SA products they love here back in the EU.

Not to mention the nearly 1 million expats around the world who’d love to get their hands on some Fizzers, Mrs Balls Chutney and likely a pair of FOM vellies or Veldskoen. 

But for local manufacturers, shipping e-commerce products hasn’t been economically viable. 

In fact, a small parcel could easily set you back R2’500. Which is nuts, considering the supply chain exists (I mean they drop off stuff here, is the ship going home empty?). 

Most likely it's a case of a large logistics provider that doesn’t wanna deal with the small guys.

Unless, of course, you find a way to fix that…

Enter Tunl

Local logistics startup Tunl fills the gap between supplier and logistics provider by negotiating in bulk and fulfilling some of the work the logistics provider then doesn’t have to do. 

And they have made some big strides in unlocking exports for over 750 merchants and shipping over 11’000 parcels around the world in 2023. 

No doubt that, as the tide rises in e-commerce locally, one of the major opportunities around will be for local manufacturers to start shipping products – locally and all over the world. And with Tunl saving stores up to 75% on shipping, this might just be a massive opportunity for locals to sell into those mature e-commerce markets.

The global e-commerce market is massive. Taking a great South African product and selling it overseas is a major play…. We’re watching this space.

IN SHORT

💼 Hustlers Wanted. Google’s Hustle Academy is back. This 5-day virtual bootcamp for small business owners in South Africa, Kenya, and Nigeria focuses on leveraging AI to elevate small businesses to the next level.

💸 Smooth Operators. OpenseedVC, an operator VC firm backing operator founders in Africa and Europe, has reached the first close of its $10 million angel-style early-stage fund.

😵 Teams Fatigue? Well, Google might just be coming to your rescue. Off the back of some cybersecurity failures, and some pretty decent discounts, Google is hoping to entice a large chunk of corporate and government customers to ditch the Office and take up Workspace.

🔓 Freeeeeedom!!!! Happy Tax Freedom Day for yesterday (20 March 2024). It’s the day when the average taxpayer has earned enough to fulfil their annual tax obligation and to pay for 1 year of government spending. From today, you’ll be working for yourself, and your family.

📺 Cheerio Mate. Joining a slew of high-profile international companies pulling out of South Africa, streaming service BritBox is set to exit SA in August this year.

BUILDER’S CORNER

How to Pick a Niche For Your Startup

by Sheldon Bishop author of one of our favourite startup newsletters called The Zero to One

The best way to stand out when starting a new business is with a very specific offer appealing to a specific group of people.

If you start selling consulting services to everyone, you’re instantly in direct competition with every other consulting service provider out there.

Offer the same to, say, “CEOs of scale-ups that recently raised Series B funding” and your positioning makes them feel understood and your service instantly becomes unique – you might be the first, able to set your own price, etc.

Great, so how do you niche down strategically?

My 3-Step Framework For Finding Your Ideal Niche

Step 1: Start with a crowded market

This might sound counter-intuitive, but the upside to a crowded market is the Product-Market Fit has already been proven – people are willing to pay for solutions.

Take banking for example: People need financial solutions and, historically, you had SA’s Big Four offering a range of products to the already-banked population.

Then TymeBank came knocking as SA’s digital bank, partnering up with your Pick n Pay and Boxer retail stores to target financially underserved markets with specific and relevant solutions, and the rest is unicorn history.

Step 2: Pick the right niche

There are 3 factors that unlock your access to a specific niche – ranked in order of ease:

1. You’ve worked in the niche, so you know its ins and outs.

2. You know someone who can introduce you to the right people.

3. You don’t know anyone in the niche, but you know you can easily get in touch with people on the inside.

Step 3: Make it profitable

When you’re picking a niche, it has to be worthwhile, so keep these two points in mind:

1. Always pick a profitable niche: You want customers who have deep pain points, but also money to spend.

2. Only focus on qualified clients: Unqualified clients make it extremely difficult for you to deliver results. These clients need more work and support and are often the least happy about your services.

Targeting qualified clients sets you up for success to deliver awesome results and spread your brand name.

This is a short adapted excerpt from Sheldon’s latest newsletter. For more on this topic and others sign up to Zero to One here.

YOUR VOICE

We asked where you think tech can add the most value in the fight against crime, and pattern-spotting’s the way…

🟨🟨🟨⬜️⬜️⬜️ 👨‍💻 Crime Detection (19%)

🟨🟨🟨🟨⬜️⬜️ 🚔 Visibility (Patrols, CCTV, Drones) (26%)

🟨🟨🟨⬜️⬜️⬜️ 🤖 Crime Prevention (15%)

🟩🟩🟩🟩🟩🟩 📈 Crime Pattern Identification (31%)

🟨⬜️⬜️⬜️⬜️⬜️ 🦾 Prosecution (ChatGPT handing down sentencing like RoboCop) (9%)

Your 2 cents…

You’re probably right, Sivuyise, not to mention we’d finally get the type of world 90s action movies promised us!

Nice one, Jason. Yeh, imagining every SAPS member with a Tony Stark-style Jarvis in their ear giving strategic input and analysis is pretty rad, too.

WINNER + NEW COMPETITION ROUND ON FRIDAY!

This Friday, we’re announcing the winner of this week’s R1’000 Takealot voucher and a copy of SA startup unicorn must-read, The First Kudu (check out the new audiobook here).

Check Friday’s Open Letter to see if you’re the winner. And if you haven’t entered yet, what ya waiting for? Reply to this email and tell us the name of any South African startup or company you think will make it big!