The rise and spending power of black consumers is boosting South Africa’s retail sector, but there are few black-owned retailers able to take advantage of this trend. One exception is Tommy Makhatho, CEO of Bibi Cash and Carry, whose business has grown tremendously, with six stores in the Free State and one in Gauteng. Makhatho left school in 1976 at the end of standard nine and worked as a waiter at a restaurant in Joburg’s swanky Carlton Hotel. One of his customers was a flashy hairdresser who always wore a cowboy hat and drove a top-of-the-range left-hand-drive limousine.
“He liked me because I was curious about his business and eager to learn,”says Makhatho, recalling how the man gave him his first break and employed him as a part-time trainee shampooist in his salon. Makhatho went on to qualify as a professional hairdresser. In 1982, with R7 000 in the bank, he decided to leave Blackwave and go it alone in Soweto, but failed to build a clientele and was soon forced to ask for his job back. “I had been over-ambitious and made a mistake of not planning properly, ”says Makhatho. A year later he was on the road, distributing hair-care products and bed linen in townships in the Free State, Northern Cape and Lesotho. “I travelled thousands of kilometers every week and the business was doing well. I quit my job again and opened a salon in Qwaqwa.”
In four years he opened six more salons. But rapid growth made it difficult to control the operation and the sales people. “I couldn’t manage the business from a distance, so I had to close the branches and go back to the original salon. I had, however, accumulated R300 000 in two years. “The experience taught him that distributing hair-care products from a main centre would be easier to control and manage. The Jabula Cosmetic Centre in Qwaqwa opened in May 1991 and four others followed. There were over 3 000 different stock lines, which meant the business needed more storage space and more sophisticated planning, management and control systems. A warehouse was opened in 1992. In 1998, Makhatho entered the supermarket sector and opened the first Bibi Cash and Carry Family Supermarket in QwaQwa. All company profits were ploughed back into the business to fund expansion. A second store opened at the Setsing Shopping Centre in 1999 and a third at the Naledi Mall in 2004. In 2006 Bibi Wholesale was opened to service small to medium enterprises.
“One of the most important lessons I have learnt is that running costs always increase, so if you don’t expand you will not make profit”. Accordingly, his company has created its own stokvel and has members in many Free State towns. “The stokvel industry is worth about R6 billion, so it makes sense to tap into it. Our members bank their money with us, we give them vouchers and they provide us with a list of their needs. “Makhatho is a firm believer in the power of advertising and spends 1% of the business turnover on leaflets, flyers, SMS promotions and radio commercials. “ We believe in conducting our business professionally, progressively, honestly and with a commitment to address the needs of our predominantly black customers". Makhatho now employs over 800 staff, indirectly supporting over 4 000 people. The company also contributes to community-based projects and provides scholarships to a number of university students. “It is my dream to expand the number of stores and we are working on a franchising concept,” he says. “Township businesses were once considered risky, but now malls are popping up all over the place. I’m proud to have been one of the first retailers to service people where they live”.
Bibi Cash and Carry has also embarked on a container project, where container shops are placed in different areas around Qwaqwa. The idea is to create entrepreneurs. Potential employees were identified to operate the Bibi Quick Stop container stores. Those who showed potential were given training in business management, retail operation, retail finances and customer service. Each container provides work for three people. The aim is to groom these people working in containers, to become owners in the next five years or so. All the people working in the containers are paid a basic salary by Bibi Cash and Carry. We currently have six containers situated in Seotlong (1), Lusaka (2), Molapo (1), Phuthaditjhaba (1) and Bluegumbosch(1).
In 2013 he won the Sanlam Business Partners Entrepreneur of the Year and Job creator of the Year Awards, which took place at the Hyatt Regency in Rosebank. Delighted at his win, Makhatho said; “I’m honored to be honored as the overall winner. He continued, “What is the secret? We had the right recipe, being chosen is not about what you say, it’s about what you do right. I’d like to thank my team. I am delighted to have my son working with me. There is another 25 years ahead of us. My dream is to become one of the major players in the FMCG market.”