Zimbabwe has one of the biggest informal sectors on earth and the sector keeps expanding with college graduates, those retrenched and even those formally employed joining the sector mainly for survival purposes.
And for long the sector used to be shunned by big companies as its regarded as filthy, uncouth and a tax evading business sector. For long Economists and policy makers regarded the sector as a sore thump that needed to be destroyed and replaced by formalized businesses.
However faced with economic headwinds over the past months, corporate strategists are taking an interest in the sector and competing with some of the players in the sector especially in the area of groceries. With dwindling disposable incomes in the country, many retail shops are tweaking their business models in a sink or swim reality.
The informal sector has been a preserve for foreigners such as The Congolese and Nigerians especially in downtown but local manufacturers such as Simbisa brands are deep penetrating into the informal sector in search of the scarce greenback.
Of course Simbisa is not new to the informal sector as its Bakers Inn took over bread delivery to tuckshops and even extending to peri-urban areas.
So what has changed in 2023?
Irvines Chickens recently opened a container in Kuwadzana Extension in Harare and has been seen in other areas in the Western Suburbs. Question is who are they targeting? Who are their customers? Well the answer lies in a concept we made popular on the forum—B2E , Business 2 Entrepreneur or in short Make Others Make Money.
Their target market is mainly those interested in making money through selling to others—a model that pushes volumes. And its not only Simbisa hunting for the dollar as other manufacturers are venturing Westwards and in some instances bypassing the usual route of retail behemoths and wholesalers.
Drive trucks and park them in high density for fast cash. Of course this comes with added risks of cash robbery, but high risk—high returns. Well done to Simbisa but increasing competition and crowding out small businesses?
Whatever the verdict you can arrive at—what is apparent is the informal sector could well turn out to be the area of last resort for the corporate sector. Collect cash through Innbucks and essentially become an informal sector bank and then push for more.
It’s the year of trucks being redirected and heading to the ghetto for survival.
