Word of Mouth Drives E-commerce Growth in South African Townships

South African startup, Word of Mouth, is transforming the way people shop in township areas. By creating an end-to-end e-commerce platform, Word of Mouth empowers local entrepreneurs and provides convenient access to products for consumers.

A Community-Driven Solution

Initially launched as a service-based e-commerce platform in 2018, Word of Mouth adapted to unforeseen challenges during the 2020 lockdown. Faced with the imminent economic collapse of its target communities due to the COVID-19 pandemic, the platform pivoted to focus on products—primarily footwear and apparel. This shift helped the platform remain relevant and support its users, many of whom were battling unemployment.

Founder Simon Barson explained, “We unlock the potential of township areas by removing the barriers that unemployed youth face when setting up and running e-commerce stores locally.”

“Through the platform, we provide partners with access to inventory without the need for upfront capital, local township delivery services so they can reach more customers, and training so they can grow with their businesses,” Barson continued.

These efforts have allowed over 500 unemployed youth to build profitable online businesses, leading to the delivery of more than 30,000 items over four years. The startup is funded by philanthropic investors, including the Michael and Susan Dell Foundation, SAB Foundation, and others, who have all been been instrumental in supporting the platform’s rapid growth while offsetting its operational costs.

Overcoming Challenges and Driving Growth

While e-commerce has flourished in South Africa’s middle- and upper-income markets, lower-income consumers have been left behind. Word of Mouth identified this gap as an opportunity to stimulate local trade and retain disposable income within township economies.

Approximately 25% of South Africa’s urban population resides in township areas, yet 70% of disposable income flows out of these communities. By addressing this imbalance, Word of Mouth has seen impressive growth, doubling revenue year-on-year in 2022 and 2023.

Barson explained further, “We unlock the potential of township areas by removing the barriers that unemployed youth face when setting up and running e-commerce stores locally,”

Word of Mouth has experienced significant growth, but it faces challenges such as limited understanding of the informal economy and the complexities of operating in underserved areas. Despite these obstacles, the company is determined to expand its reach and impact.

A Brighter Future

Word of Mouth’s vision is to support over 1,000 entrepreneurs and expand its operations to key cities in South Africa. By calling on technology and community partnerships, the company is on course to revolutionize e-commerce in township areas and empower local economies.