Differences between migrant owned and locally owned small business retail stores: the case of Delft and Eindhoven

Abstract

This study aims to identify the core competitive factors that differentiate migrant owned small business retail stores from those that are owned by South African citizens. Primary research was conducted in two of Cape Town’s townships, Delft and Eindhoven. Data was collected through focus group interviews with open-ended questions. The findings revealed that South African citizen retailer’s lack funding to start or expand their businesses, they do not collaborate among themselves, and they lack pricing strategy. The findings also revealed that migrant small business retailers have strong business networks that enable them to collaborate in a number of business-related issues such as the buying of stock and they have networks that help them raise finance for their businesses. The researcher notes that there are agencies such as the Small Business Development Agency (SEDA) that aim to help Small and Medium Enterprises (SMME’s) but such agencies deal with all types of SMME’s. There is a need for a targeted support for the small business retail sector as it is a very unique sector in the South African small business market. The challenges faced by local small business retailers are unique when compared to those faced by their migrant trader counterparts. The foreign national small business retailers are more competitive than local South African small business retailers in the township retailing sector. The study recommends that the South African government department of Small Business Development should assist the South African citizen owners of small retail businesses to improve their competitiveness.