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More than 2 million South Africans lost their jobs as a result of the shutdown, but some companies have seen remarkable growth despite a severe recession in the economy.
The founder of Zulzi’s company says that since the start of the shutdown, the business has been booming. Image: 123rf
JOHANNESBURG – On the evening of March 23, South Africans gathered around their televisions to hear possibly the most important announcement of this year. At that time, the nation was nervous. The rate of COVID-19 infections was accelerating here at home and in the rest of the world. Very little was known about the virus, other than the fact that it was ruthless towards older people and people with comorbidities. Italy, one of the most affected countries in Europe, became a benchmark. Although there were 340,000 reported cases worldwide at the time, compared to more than 40 million today, it all seemed scary. No one knew what was going to happen next. The South African government decided to take action.
“The National Coronavirus Command Council has decided to enforce a nationwide blockade for 21 days starting at midnight on Thursday, March 26. This is a decisive measure to save millions of South Africans from infection and save the lives of hundreds of thousands of people, ”said President Cyril Ramaphosa on Monday night when his government imposed a blockade on the country.
This strategy seemed sensible, especially as the country was looking to buy time to prepare for the inevitable spread of the coronavirus. But a prolonged lockdown came at a high price. In the following months, the companies were beaten up. A staggering 2.2 million South Africans lost their jobs. Unemployment currently exceeds 30%. The government admitted that “the punch to the stomach was severe.”
But even in our darkest hour, there was a glimmer of hope. The pandemic became a boon for some sectors of the economy.
“I think the use of the Internet and the use of digital technology during COVID due to the lack of movement obviously increased. I think in the last quarter, if you look at the Statistsa release only in the last quarter, telecommunications was one of the growing sectors in COVID and in the [contraction] time, when everyone else was shrinking by as much as 90% in terms of business and production, ”says Nthabiseng Moleko, a doctoral graduate in development finance at Stellenbosch University Business School.
Johannesburg businessman Donald Valoyi can attest to this. As businesses downsized or closed their doors, his grocery delivery service, Zulzi, experienced a different reality. It grew at a rate he never predicted.
“Our orders increased 500 times immediately and that means we had to increase capacity. We had to bring in more drivers. It was very difficult because it was during the confinement. Now you have to get brave guys to come work for you. So yeah, I think it was a challenge. That kind of growth comes with a lot of pain, “he told Eyewitness News.
Valoyi founded Zulzi in 2013. He says, “We were just an e-commerce platform. We sold books to students online. “But the business transformed over time. It offered everything from pharmaceuticals and alcohol to fast food. Today, it is an inspiring company focused on grocery delivery. As a customer, submit a list your grocery items to Zulzi, via an app or website. Your order will be received at the company’s call center, before it is sent to someone who will make all purchases on your behalf. The buyer will then deliver Your groceries to a driver, who will deliver them to your door.
“We cover all the major cities. If you’re talking about Pretoria, Durban, Cape Town and Jo’burg, we are there. We have about 45 guys working in the office. So this includes the software engineers, the marketing team, the logistics managers, and the customer service team. Then we have personal buyers. Currently, we have about 250 buyers. We have about 300 independent drivers at the moment. It is an Uber type model. Obviously that number always changes depending on how much demand we have at a given moment, ”says the former FNB employee. “Actually, COVID was very good for online businesses. Any online business really took off. Wherever you look around the world, the groceries were good. Emerging company valuations soared, ”he says.
Another entrepreneur who has been grinning from ear to ear in recent months is Graham Wallington. He runs WildEarth, a media company that broadcasts live safaris. The company has a group of camera operators who capture images in the wild. Those images are then sent to televisions, computers and mobile devices around the world, through a control room in Johannesburg. At the same time, the safari guides interact with the spectators in real time. “All we’re doing is, we’re just watching nature’s unscripted process unfold, and I think most of our viewers get to have this experience often because they’re stuck, maybe because they’re not right, maybe They are”. depressed, maybe they are lonely, or maybe because they are locked up and cannot access nature easily. What WildEarth offers is a way for people to feel transported to nature, ”says Graham.
The concept is groundbreaking and has become a huge hit in the coronavirus era. “Our global traffic increased fivefold between March and April 2020. Additionally, we saw a 15-fold increase in our South African audience during March and April 2020,” he says. The growth you refer to has not yet been converted into financial returns, but WildEarth’s valuation increased.
“I think these are businesses that are going to last because there has been a change in the way we work. When it comes to, for example, safaris, the way we work has changed. Certainly the way we have fun has to change. The way we relax has to change, ”says economist Xhanti Payi.
However, developments in the local digital economy are not surprising. A StatsSA report released earlier this year shows that more than 36 million South Africans out of 59 million now use the Internet. Most people consume content on mobile devices. This means that the ground is fertile for innovative digital businesses or companies with a strong online presence.
“We were always moving towards a relatively more online society, more online shopping. Whether we’re talking about our food, we’re talking about our clothes, that’s where we were going. But I guess it was sped up even for people like me who weren’t particularly interested in that kind of thing. Now we are there, ”says Payi.
But as our nation seeks to recover from the scourge of COVID-19, are we capitalizing on the strength of digital business? President Cyril Ramaphosa recently announced an economic recovery plan with bold promises. He said his government will create 800,000 job opportunities in the coming years. The plan covered many sectors, including forestry, energy, construction, and agriculture. But he said very little about startup development, particularly in the ICT space. Although he spoke of supporting 5,000 young entrepreneurs in passing, few details were given about plans to help them.
Business experts Nthabiseng Moleko and Mark Swilling say we need to think differently. The two academics from the Stellenbosch University School of Business and the Center for Complex Systems in Transition, respectively, argue in great detail, through a document they published a few weeks ago that, “continuing on the current path, depending on the thinking and using existing microeconomic solutions is unlikely to produce different results in the future. ”
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