Young entrepreneur sees big potential in underserviced South African townships
Sizwe Nzima is the 22-year-old entrepreneur behind Iyeza Express, a logistics company that uses bicycles to deliver chronic medication to patients in Khayelitsha, a partially informal township in Cape Town.
Having grown up with his grandparents, Nzima knows firsthand what it is like to collect chronic medication at clinics every month.
“I have personal experience of what it was to actually stand in queues for more than four or five hours to collect your meds. And it frustrated me. Every time I went to the clinic I got frustrated,” he told How we made it in Africa.
In 2012, Nzima was selected to attend the six month entrepreneurial course at the Raymond Ackerman Academy of Entrepreneurial Development.
“While I was there, I was reading up on an article about how hospitals couldn’t cope with the large increase in chronic patients… in South Africa there is an increase in number of chronic patients – hypertension, diabetes, asthma… And that was when I told myself, ‘you know what, this is not only a problem that I am experiencing’. When I read the article I [realised] the rest of the country is experiencing this same problem and I need to come up with a solution.”
And so Iyeza Express was born. Using the R10,000 (US$900) he won for being the best entrepreneurial student at the Raymond Ackerman Academy, Nzima bought his first two bicycles. In 2012 he also received a seed grant at the Social Innovation Awards by the SAB Foundation. Today he has four employees who deliver chronic medication in cooler boxes to 428 patients in Khayelitsha, at the minimum cost of R10 per delivery.
“And that is just a small slice of the cake,” said Nzima, adding that he sees a potential of 12,000 clients in the township.
Recently, Iyeza Express has partnered with Metropolitan Health, an administrator of medical schemes in South Africa and a division of JSE-listed MMI Holdings. The three-year partnership, according to Nzima, is going to help him scale up his operations and formalise his business. He added that the partnership is also helping Iyeza Express to build a creditable reputation, as well as providing him with a better understanding of how the health and medical industry works in South Africa.
Tapping into the unserviced township market
According to Nzima, charging a minimum of R10 for delivering medication to the current number of patients he has is not sustainable considering his costs. But there is a strategy to it.
“My plan is very simple: I get the numbers and once I have the numbers I can do anything… I want to be the premier logistics company in the townships, so to get any products into the township it is going to have to pass through me,” he explained.
“So my main aim is to own the township market which is a market that hasn’t been tapped. So if I can tell a company I have access to 10,000 people – not on phone, but directly – what does that say? So whatever products you want to promote in the market, I can tell you that I can promote directly, face-to-face with these people that I am delivering medication for every single day. They trust me with their stuff… you can’t buy that. You have to earn that and that’s the main aim of Iyeza Express.”
For example, Nzima is looking into pizza delivery in townships, which is typically an unserviced market.
“When you look at [a pizza house] in town… standing in the queue you will find that [there are] people that live in different townships but yet they are buying pizza in town. Now what does that say?
“Those are some of the [ideas] that I am looking at. There is a huge market [in townships]. It is untapped and I just want to own the market before delivering other goods. And that is where the real money comes in,” he said.
The responsibility falls on Africa’s young people
“In my experience, in Africa there is space for innovation,” said Nzima. “And you don’t have to look far, especially when you are at a disadvantage. Look around you. You might be experiencing a problem that is a need in the community… A lot of investors are coming into Africa because it is a huge market for innovation.”
He added that young people should take responsibility, as they will be the ones running the country soon. “And if you don’t start taking responsibility now, imagine how South Africa will be in the next 10-20 years when we are the economic drivers. So we have to start taking responsibility now and engaging in economic activity already. No matter how small it is.”
So far, Nzima believes that the biggest business lesson he has learnt is that you have to be patient in business when it comes to making money, as it doesn’t typically happen in the first three years of operating.
“As a young person, a problem I have found – since I have started my business – is peer pressure from friends, from colleagues and even from family members,” said Nzima, adding that many either expect him to get wealthy fast or have commented that he is too young to start a business.
“When you go into business you need to be patient. And my patience is tested. It has already been tested and it’s still going to be tested because [an entrepreneur is] still going to make mistakes… so you have to be patient,” he concluded.