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How David Became A Goliath

The white, bold ‘W’ on a black background, one of South Africa’s best-known logos, is gaining traction elsewhere on the continent. To think it started with a small hotel-based shop 84 years ago.

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It was a sunny southern hemisphere spring day in October 1931 when businessman Max Sonnenberg and his son, Richard, opened the doors of a small shop in Cape Town’s city center. Allegedly housed in the dining room of the old Royal Hotel on Plein Street, within spitting distance from parliament’s back entrance, the store promised to bring value and affordability to South Africa’s white middle class.

Timing was far from ideal. The Wall Street Crash two years before had submerged the world in a frothing whirlpool of economic turmoil. South Africa too, was affected. Despite hardship dominated by poor economic growth, tumbling exports, and mass retrenchments, the store was a success. It did so well that it captured the entrepreneurial imagination of serial businessman Elie Susman who had made his fortune from cattle, banking, and retail.

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Having a genuine eye for business opportunities, Susman was taken aback by the success he saw, prompting him to financially back the opening of a second store in Durban. More branches followed suit and soon Woolworths was deeply embedded in South Africans’ day-to-day shopping lexicon.

Since the 1930s, Woolworths has morphed into a multi-billion-dollar holding company, comprising the familiar Woolworths food and clothing brand, as well as Australian brands Country Road and David Jones. The latter, a denim retailer, was bought last year for $2 billion. The acquisition proved to be a massive boost for Woolworths Holdings Limited (WHL), which saw its profit over the first six months to December 28, 2014, jump by 29%. Sales increased by 55%, to $2.56 billion. Without the David Jones business, sales would have grown by only 12.5%.

The David Jones acquisition also led to an expansion of WHL’s footprint, to 1,200 stores in 15 countries worldwide, including Australia. The 633 Woolies branches in 12 African nations, including Botswana, Namibia, and Kenya, however remain the company’s backbone. This number is likely to increase.

“We want to grow our footprint by some 10% per annum for the next three or four years,” says Group CEO, Ian Moir, adding that a lot of attention will go to the food side of the business. “Our food footprint has more than doubled since 2010.”

While WHL has been doing well, things have not always looked bright. The retailer was badly affected by the economic crisis of 2008/2009, which sank South Africa into its first recession in 17 years. Moir says the attitude of the company, which only comprised food and clothing at the time, towards its customers, was one of the culprits.

“We had become complacent, arrogant, and too expensive, and we were not listening to our customers. As a result, our sales plummeted during the recession,” he says.

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The downturn forced Woolworths to rethink its strategy.

“Someone once said that one should never let the benefits of a good recession pass by,” says Moir. “The Woolworths of today sees the customer as king, not the product. That is the big difference. If the customer thinks we are wrong, then we are wrong. If the customer thinks our prices are too high, then the prices are too high. That has been the biggest transformation since the recession.”

Complaints are taken seriously, says Moir.

“We used to be known as arrogant and not wanting to listen. Today, we reply to all complaints, queries, and criticism through our customer communications and social media teams. I even get some of them.”

The Woolworths approach has been well received in South Africa, as well as in other African countries such as Botswana and Namibia. Here the brand is still growing substantially. In some countries however, Woolworths didn’t manage to get off the ground. Nigeria is one of them. Last year the company decided to pull out of Africa’s largest economy for the second time.

“We were losing money hand over fist. Nigeria is a very difficult market for any apparel retailer to make money in. Firstly, the Nigerian retail market is largely informal, with very few shopping malls. The rental of the shopping malls that do exist, is very high,” says Moir.

“Doing business is very difficult, generally speaking, from traveling around to getting goods in the country,” he says, adding that Woolworths uses the same suppliers regardless of the location.

“We made a mistake by going into Nigeria, despite having the right partner,” Moir confesses. “It was the second time we tried it, and we won’t be trying it for a third time. Nigeria just doesn’t work for us.”

Moir doesn’t see Woolworths’ Nigeria adventure as wasted time. Making mistakes, he says, makes you grow.

“You, as a business, can always get better, and you will always make mistakes and there are always things to learn. My biggest fear is complacency in a business. If you think you won’t make mistakes, then you will fail.”

In other countries, business is going well. Moir says this is a result of the way Woolworths treats its employees.

“Our salaries are competitive and our benefits are better than elsewhere.”

Based on feedback from employees, the jobs portal, Indeed.co.za, gives Woolworths four out of five stars as an employer with staff discounts and incentives lauded. It, however, says salaries are too low and work hours too long.

The brand’s strength, according to Moir, is associated with value, principles, integrity, and sustainability.

The company donates $79,000 to educational causes every week. Moir also says the company is committed to environmental sustainability, such as minimizing water consumption and reducing the use of genetically modified organisms (GMOs).

Despite its good intentions, Woolworths has faced the wrath of environmental activists more than once, and for a multitude of issues, including the treatment of pigs, the use of GMOs and claims the company’s free-range milk was not free-range at all.

“That type of activism is good for us as it forces us to do the right thing,” says Moir.

“That is why we, apart from selling free-range eggs, want to ensure that free-range eggs are used in all Woolworths branded products, down to the cake mix. This was a tough process. You are, after all, dealing with large suppliers of which you are not the only customer. As a result, you can’t do things as fast as activists would want you to. It takes years sometimes.”

Environmental activist, Caroline Hurry, however, claims the company won’t speak to her.

“They refused to answer any of my questions in writing. In the beginning, when I started investigating their practices in relation to animal cruelty, they suggested I call them for ‘a little chat’. But being a journalist, I insist on answers in writing. I have also found that the soy in their bread had the second-highest GMO content in the country… Woolworths doesn’t label all their GM food. At best, the label says ‘may contain GMO’. I have now been blocked on Twitter, by the very account that told us to ask questions,” says Hurry.

While he has sympathy for environmental activists, Moir is no fan of the Boycott, Divestment and Sanctions (BDS) campaign, which calls for the active isolation of Israel and for the country to end its occupation of Palestine. In South Africa, BDS has its teeth firmly sunk into Woolworths. Their objective is to force the retailer to stop selling Israeli products – 0.4% of its total offer.

“These protests were very unpleasant for our staff and customers, with pig heads being left on our shelves and people charging through stores, knocking over our goods, destroying them even. We have had protestors lying on the floor, pouring blood over themselves. A court order has stopped this.”

Despite the court order, the protesters claim their actions were costly for the retailer.

“The campaign is successful and growing. An independent report, released by Wits University, states that WHL has lost close to $3 million, since the start of the #BoycottWoolworths campaign in August last year. A survey among 300 people has shown that 84% of respondents said they stopped shopping at Woolworths shortly after we called for boycott,” says BDS coordinator, Muhammed Desai.

Despite a few setbacks, Woolworths has grown from a small store in Cape Town to an international retailer – a story of shopping bags

to riches.

Entrepreneurs

‘Toilet Paper, Gently Used.’ How Facebook Marketplace Has Become An Unlikely Platform For Comedy

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In the two days since he advertised  “unprocessed toilet paper” for sale on Facebook Marketplace next to a photo of logs, David Traichel says the response has been better than expected. No actual buyers, just hundreds of views, laughs, and “you made my day” from other users browsing through the online classifieds.

“So many people are so freaked out about the idea of not having toilet paper,” says Traichel, 39. The aerospace technician and welder from Northford, Connecticut generally uses Facebook Marketplace to sell vintage car and bicycle parts. He decided to offer his oak and cedar woodpile (price, $1) to jog users out of their shopping panic. “Maybe those people would see the ad and think, ‘OK, maybe I’m overreacting.”  

Homebound Americans have turned to scavenging on ecommerce sites like Amazon, eBay and Facebook Marketplace for the boring household goods that have become hot items during the coronavirus pandemic. The shortages have inspired some mercenary sellers to excessive pricing (say, hand sanitizer for $149) and prompted the tech companies to crack down on price gougers. The hoarding frenzy has also been catnip for armchair humorists, who have found an unlikely platform to yuk it up in the free classifieds of Facebook Marketplace. 

You snooze, you lose. KIM MARIE/FACEBOOK

On the social network’s 800 million-user shopping site, one Internet standup is offering “toilet paper, extra long roll” for $69,4202—it’s a CVS receipt wound around the toilet paper dispenser. Another wants to sell you the “last roll of toilet paper in the world,” marked at $10,000. As a last resort, yet another smart aleck is advertising $90 toilet paper alongside a photo of sandpaper. “Don’t go without during this crisis,” it reads.

In reality, there’s no toilet paper crisis. Unlike imports such as iPhones and flat-screen TVs, most U.S. toilet paper comes from domestic factories, buffering supplies from a drop in production in China, where the viral outbreak started. Georgia-Pacific, maker of AngelSoft and Quilted Northern, is boosting its U.S. production. Proctor & Gamble, which makes Charmin brand toilet paper, Bounty paper towels and Puffs facial tissue, says production at its U.S. plants is at record highs. “Demand continues to outpace supply, but we are working diligently to get product to our retailers as fast as humanly possible,” says P&G spokeswoman Loren Fanroy

Which makes it all the more absurd that anxious shoppers stripped supermarket shelves of every last double-ply roll. Relishing the irony, Kim Marie, a 42-year-old naturopathic practitioner from Manorville, New York, decided this week to flog “vintage toilet paper” on Facebook Marketplace. For just $55,990, she’s showcasing a water-damaged and rotting roll mounted on a rustic wall, closing with the Craigslist battlecry of overpriced junker listings, “no low ballers, I know what I got.” Marie, who regularly sells vintage housewares on the site,  says she has received no serious inquiries. Just as well, since the item listed isn’t actually in Marie’s possession— it was a funny photo texted to her by her husband. She threw it up on Marketplace “to lighten the mood.”

See more of Liz Stoppiello’s work on her Facbook page, @Stitchizbyliz.
 
LIZ STOPPIELLO/@STITCHIZBYLIZ

It was the “organic toilet paper,” a $10 baggie of leaves listed on Facebook Marketplace by her brother’s girlfriend, that inspired Liz Stoppiello, 27. The stay-at-home mom usually sells items like car seats and books on Facebook Marketplace. This week she’s offering “washable crochet toilet paper! Been used only a cpl times”  for a cool $100. The advertised off-white crochet squares, wrapped around a cardboard tube, look worthy of an Etsy storefront. It took about 30 minutes to make. She just wanted to “get a good laugh” from people and to promote her crochet-oriented Facebook page. “You never know if anyone will start to desperately need handmade items in the near future lol,” she said via email. 

Her fellow Marketplace posters might be in on the joke, but Facebook’s bots are not. The social network, which uses artificial intelligence to help monitor content and warned Monday that its systems may have removed some COVID-19-related posts in error, had flagged Traichel’s toilet paper ad for unprocessed wood as “under review.”

Facebook “must be so flooded they don’t know what to do,” Traichel emailed, adding an “lol.” He isn’t interested in making a profit, at least not on his firewood. “If people really need toilet paper, I’ll give ‘em a roll.”

Helen A. S. Popkin, Forbes Staff, Innovation


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Entrepreneurs

Houseparty: Is The Hit Coronavirus Lockdown App Safe?

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Houseparty, with 10 million downloads on Android and millions more on iPhones (Apple won’t confirm exact numbers), has become one of, if not the hit app of the coronavirus shutdown. Vogue even called it “the quarantine app you need to download immediately.”

It lets users start and join a handful of games – Heads Up!, Quick Draw! and Trivia – all with live video and chat. And, thanks to COVID-19 restrictions on people leaving the house, the Epic Games-owned property is scoring many more fans.

But Is Houseparty Safe To Use?

There is some good news on the safety front: there are no obvious flaws or dangers with the app. Forbes had cybersecurity and privacy researcher Lukas Stefanko take a look at the Android version of the app to see if there were any other potential issues. He said there was nothing of concern.

“I analyzed the app’s permissions usage and since the app provides video chats with your friends it is logical that requested permissions are necessary. I haven’t found any shady misusing of them by the app,” said Stefanko, a researcher with cybersecurity firm ESET. “The app doesn’t provide a lot of in-app options and settings, which creates less scenarios for exploiting security issues.”

From a privacy perspective, there’s one obvious issue that some might want to note before diving in: games are open to any of your friends and any of your friends’ friends, unless you lock the “room” where you’re playing. That’s easily fixable, however, with a simple hit of the padlock button at the bottom of the screen. If you don’t lock rooms down, there’s a chance people you don’t know will invade your fun.

What Does The Privacy Policy Say?

There’s also nothing obviously outrageous in the Houseparty privacy policy. Perhaps the most concerning, though, is that it can collect “anonymized and aggregated information, such as de-identified demographic information” and “de-identified location information.” As seen in recent news about antivirus company Avast, even when location data is “de-identified,” it’s still possible to find out who the person is by linking it with other information. (That kind of aggregated location tracking is something global governments have considered using to follow the spread of coronavirus. Perhaps they could ask Houseparty to help out as they’ve reportedly done with Facebook and Google.)

Whilst the app collects contacts so you can find friends to play with, the company promises it “will never share your phone number or the phone numbers of third parties in your contacts with anyone else.”

There is the standard warning that user data can be used for more targeted advertising. If you’re concerned enough about that, there are further steps you can take to protect your private information and still use Houseparty.

How To Use Houseparty Privately

There are a few things you can do to boost the privacy of your Houseparty games. First, head to settings, which can be found by first clicking the smiley face at the top left of the screen, then hitting the cogwheel button when the menu appears.

Then you can turn on private mode, which locks every room you’re in. You can also go to the permissions section and turn location on or off. It’s turned off by default, so leave it that way if you want to ensure your whereabouts are private. And if you want to go even further protecting your identity, use a fake name and birthday in the profile section.

It’s also possible to opt-out of receiving any emails, texts or notifications about Houseparty offers. Go to section 5 of the Houseparty privacy policy (it’s brief, don’t worry) to find out the best way to opt-out of each. To withdraw consent for Houseparty to use any of your personal data, users can also email [email protected]

One other neat trick learned whilst using the iPhone version of the app: hold down on the Houseparty icon and click on ‘Sneak into the House.’ That means that when you go in, none of your contacts will be notified.

Thomas Brewster, Forbes Staff, Cybersecurity

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Billionaires

How To Become A Billionaire: Nigeria’s Oil Baroness Folorunso Alakija On What Makes Tomorrow’s Billionaires

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One of only two female billionaires in Africa, with a net worth of $1 billion, Nigeria’s oil baroness Folorunso Alakija elaborates on the state of African entrepreneurship today.

The 69-year-old Folorunso Alakija is vice chair of Famfa Oil, a Nigerian oil exploration company with a stake in Agbami Oilfield, a prolific offshore asset. Famfa Oil’s partners include Chevron and Petrobras. Alakija’s first company was a fashion label. The Nigerian government awarded Alakija’s company an oil prospecting license in 1993, which was later converted to an oil mining lease. The Agbami field has been operating since 2008; Famfa Oil says it will likely operate through 2024. Alakija shares her thoughts to FORBES AFRICA on what makes tomorrow’s billionaires:

What is your take on the state of African entrepreneurship today? Is enough being done for young startups?

There are a lot of business opportunities in Africa that do not exist in other parts of the world, yet Africa is seen as a poor continent. The employment constraints in the formal sector in Africa have made it impossible for it to meet the demands of the continent’s working population of which over 60% are the youth. Therefore, it is imperative we harness the potential of Africa’s youth to engage in entrepreneurship and provide adequate assistance to enable them to succeed.

Several governments have been working to provide a conducive atmosphere which will promote entrepreneurship on the continent. However, there is still a lot more to be done in ensuring that the potential of these young entrepreneurs are maximized to the fullest. Some of the challenges young startups in Africa face are as follows: lack of access to finance/insufficient capital; lack of infrastructure; bureaucratic bottlenecks and tough business regulations; inconsistent government policies; dearth of entrepreneurial knowledge and skills; lack of access to information and competition from cheaper foreign alternatives.

It is therefore imperative that governments, non-governmental agencies, and the financial sectors work together to ameliorate these challenges itemized above.

The governments of African nations should provide and strengthen its infrastructure (power, roads and telecom); they should encourage budding entrepreneurs by ensuring that finance is available to businesses with the potential for growth and also commit to further improving their business environments through sustained investment; there must also be a constant push for existing policies and legislation to be reviewed to promote business activities.

These policies must also be enforced, and punitive measures put in place to deter offenders; government regulations should also be flexible to constantly fit the dynamics of the business environment; corruption and unethical behavior must be decisively dealt with and not treated with kid gloves. We must empower our judicial system to enable them to prosecute erring offenders with appropriate sanctions meted out. There should be no “sacred cows” or “untouchables”. The same law must be applied to all, no matter their state or position in the society; non-governmental organizations can also provide support for them through training and skills acquisition programs that will help build their capacity; they could also provide finance to grow their businesses; more mentorship programs should be encouraged, and incubators of young enterprises should be supported by public policy aimed at improving the quality of these youths and their ventures; and also, avenues should be created where young entrepreneurs will be able to connect, learn and share ideas with already successful well-established entrepreneurs.

What, according to you, are the attributes needed for tomorrow’s billionaires?

There is no overnight success. You must start by dreaming big and working towards achieving it. You must be determined to succeed despite all odds. Do not allow your setbacks or failures to stop you but rather make them your stepping stone. Develop your strengths to attain excellence and be tenacious, never give up on your dream or aspiration. Your word must be your bond. You must make strong ethical values and integrity your watchword. Always act professionally and this will enable you to build confidence in your customers and clients. 

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