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Why are foreign-run spaza shops more successful? The rapidly changing spaza sector in South Africa

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Why are foreign-run spaza shops more successful? The rapidly changing spaza sector in South Africa

13th November 2013

By: Econ3x3

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This article examines the contrasting business models in the spaza shop sector, and compares foreign-run businesses with South African businesses. We argue that foreign shop keepers are more successful than South Africans because of the strength of their social networks, which provide them with access to labour and capital and enable collective purchasing and market domination. The articles argues for a two-pronged policy that would formalise larger shops whilst permitting and encouraging informal micro and survivalist businesses.

Written by Rory Liedeman, Senior researcher, Sustainable Livelihoods Foundation

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Andrew Charman, Director and researcher, Sustainable Livelihoods Foundation

Laurence Piper, Professor, Department of Political Science, University of the Western Cape

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Leif Petersen, Director and researcher, Sustainable Livelihoods Foundation

This article was first published on the Econ3x3 website – Accessible policy-relevant research and expert commentaries on unemployment and employment, income distribution and inclusive growth in South Africa.

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