GG ALCOCK — KASINOMICS THE TOWNSHIP ECONOMY IN SOUTH AFRICA

big study 3.8 legendary radio for you on Monday nights it is what's involved and tonight I'm always excited so let's just get past that I'm excited about it but I've got a very special guest in studio tonight and a gentleman that I heard of actually via and somebody had interviewed before Steph Vermeerlen and we were we were talking about this fourth Industrial Revolution and Africa in South Africa and she said to me you gotta get hold of Gigi Alcock so I went okay who's he and then did a bit more research and here he is tonight Gigi Alcock welcome hi thank you so good to have you in the studio now a bit of background okay so you are now amongst many other things which we're going to talk about but you know the author of three books the most recent one released in November last year it's called Casinomic Revolution the rise of African informal economies and when I first heard about this whole Casinomics thing I was like yeah and I can't really be a thing and it is it's a it's a big thing so we're gonna be getting into that but first tell me a little bit about Gigi because what I've heard and may we may we talk about this you are affectionately known by a lot of people is the white Zulu and your story is very similar to a very famous musician in terms of the fact of that being Johnny Clegg so tell us a little bit about Gigi Alcock where do you where do you sort of come from and and you know tell me a bit about the journey cool so thank you I am so my parents were political activists and they believed anyway to change people's lives was to live like them so they built a mud hut with no running water no electricity I'm in a place called Msinga in KwaZulu and Msinga is one of the most arid poorest places in the country and they brought us up my mother we were incredibly poor my mother taught us at home and our primary after we do schooling in the morning at a stone table and then we would go out and go to it and stick fight those are kind of primary you know skills we learned and we still feel we were incredibly underprivileged you know if we went to town and visited white friends and we had meat we used to say what died because the meat was when something died and we had no TV and no toys and yeah so so we grew up like that and my mother still lives just like that in a mud hut with no running water in a Zulu community and as happy as can be happy as anything and I guess one of the first times I realized the huge benefits of growing up like that was I was in a pick-and-pay and I was writing out a check shows how old I am and I was writing out a check and the lady behind the counter said to the lady who was packing the the bags she said I will get a woman in real engine and fair name which means look at this white man he's got a hair like a baboon talk about my arms and so I said nothing I taught the check and I gave her the check and I said oh I want if anybody check have you ever seen a baboon writing out a check whether she screamed and she said sorry boss I said I've gone from baboon to bus and and with which she fled and she she wouldn't finish the transaction of course everyone was telling each other what had happened and everyone was laughing like crazy and I realized a huge benefit not only speaking a language was understanding deeper things you know sense of humor sarcasm irony you know people's deeper kind of elements which are brought into marketing and and the business that I created so you grew up in this in this very impoverished area as you said you didn't you didn't have a lot to eat you grew up I'm presuming on traditional foods and then so so what changed where did you go from I mean because you said yourself I mean you've had no formal education and this you you can't stick fighting and go turning so where to you from then so you 18 when did you move out of home so initially well I moved out of home after school and eventually was forced we were forced to go to a local government school because the government said at the time we had to spend time with other children and my parents said well they've got thousands of black kids they're spending time with but they didn't count so in high school we were sent very reluctantly to the local government school and which we hated of course I mean we were seen as these complete outcasts you speak as we so my brother and I you and your brother yeah so my brother's name is maconia which means to make a loud noise in Zulu and and does he does he so so yeah so I moved I became a political activist and I was involved in number of non-government organizations kind of ANC aligned and and I was you know really believed in the struggle and and coming from the Zulu community about liberating our population and then of course the ANC was unbanned and then went towards elections and ours the whole election thing didn't fit with me I was much more into the kind of struggle then then then voting and an election so I moved to Joburg to enter the capitalist economy and in fact you know they call in singer they called Johannesburg one dongazia duma which means the walls that Thunder which is very appropriate if you come from little I'm seeing and you arrive in in Johannesburg one dongazia duma you know the walls thunder with noise and sound so the romanticized idea of counting is not all that pervasive no no no so yeah and I became I had nothing I had I was qualified for so I became a bricklayer and then I started a telephone business public telephones because I realized no one could access his township so I'd put up telephones in Alexandra Zulu men's hostel that was no was this prior no this was just post 94 there this was an 89 90 90 one yeah so that was before it became cool to go into townships oh yeah I mean I was perpetually the only white person in those townships and and I knew them very well and and stuff so you know I could move around people perpetually saying are you lost you know and I used to have lots of fun cuz at the time you know for people young kids would see a white person and go I'm long go and suit you and and and I would stop them and I say where's the white man show him to me in perfect Zulu or city you know and these kids got screaming away like there's a weirdo it's it's amazing though if you look at it and in terms of at least the people I know how many people do not know how to speak in African language I mean I can kind of stumble by yeah you know and literally stumble by and probably very badly and I know I have been the butt of many jokes and I have taken out my broken Zulu but most people come most people have no idea you know it's a tragedy because I think if people had spoken or even now I mean I encourage my daughters I've got daughters Andy and another one called Gonsi and they've got Zulu names very blonde blue eyed young girls Zulu names and and you know speak Zulu and and and and it changes things completely you know I get away with traffic fines I get the last wine the bottles of wine the wedding and and and you know so yeah we are talking to my special guest in studio at GG Alcock we talking about amongst other things his latest book the carcinomic revolution we'll be back with Gigi in just a bit welcome to what's involved on a Monday night my guest in studio with me tonight author speaker can we say revolutionary are we allowed to say that still GGL cock and just before we went into the record we were talking about how you got into business etc etc and we're talking about you're putting those phone booths in in in the townships yeah how to where did you go to from there because it fascinates me that you know a very well-known author with three books under your belt and more speaking engagements than you know what to do it so yeah I mean I was struggling to do anything I could in the township environment with these phone booths were one of them and I kind of started becoming aware of the fact that very few other people were in this market and doing anything in the sector it was a case of not even knowing where these places were you know at that time there wasn't a signpost for so where to you could drive around and around Johannesburg you never find the way into swear to unless you knew where it was and yet I knew these places and interacted with people and so my next step was I was eventually ended up working at a company called group Africa which is one of the very first businesses that focused on these informal economies and township environments and rural environments and group Africa was perfect for me it was really about marketing and the language I could develop you know material in the languages of people as well as access those environments and I was there for a while before I decided to go off on my own and I created a marketing business called Mina now a marketing in about ninety four five ninety five and it was really the first business that ad agency that focused on the township or the mass market at a time when people didn't really believe I mean they still don't believe it now but at the time it was like impossible to believe there was any opportunities or market in that sector what I mean for so long and and again this is this is one of the things I often think of and I think how sad it is because there is still very much despite the fact that we've had this democracy there's very much this divide this black and white divide and if you speak to people a lot of people about townships and township love they kind of go yeah it's over there and nobody in at least hardly anybody in my circle of influence really knows what goes on in townships and but we're all just people and yet it's so different and you talk about this thriving economy there and a lot of times people look at you and go yeah okay just humor the crazy man yeah you know it is it is a massively thriving vibrant environment and and yeah like you said people are still afraid they have misconceptions the idea is that the townships are rows and rows of shacks and any 14 percent of our population is actually an informal houses so they transformed places I mean many people afraid and yet I mean this is this is the future of our society is a majority of our society live in those environments and I just look at some of the things we created in that you know I was chatting earlier but we we introduced cheese slices into township food into fat cooks and what they call quarters this is now a fascinating story because you would think the humble cheese slice yeah everybody knows about that everybody's knows how to sell it yeah and yet you did something which was seen as absolutely revolutionary it was Monday yeah so we I mean we identified this thing called a gorda which is a quarter loaf of bread with slop chips and a chair in a slice of Poloni and sometimes a Russian endorsed by the Hart Foundation as you can imagine and the Banting but so we identified these gordas and we introduced cheese slices into them at a time that people there was a completely invisible sector today it's worth more than one and a half billion rand a year cheese slices sold into quarters and fit cook in this in this market the quarter is is now becoming well known as the hamburger the townships just the food sector in the townships the fast food what I call gasi course which is everything from a hodu which is tripe to I'm a plate which are plates of food scope scope scope you know and so on is with 87 billion rand a year fifty thousand township outlets turning over 87 billion rand so you have this massive sector just that's just the food sector and it is a massive and it's I think it's a fascinating food sector as well but you've got to be open-minded then I mean this is you kind of grew up in that environment I mean the first time you know I had like somebody present me with this with the sheep's head I kind of looked on in horror and goes where's the rest of it because that's the bit I like you know yeah trap as well you know it's the same as I don't know drop and top orders delicious I don't like something that's that can be able to taste me so no but it does take a while some of it takes a while to kind of get your head around once you do and you develop a taste for it there's some amazing foods that come out there you know take someone who eats tripe or scope or whatever it might be and offer them a prawn and they're likely one oyster and they're likely to have the same reaction you know the thing about it is that the sector's grown because of being culturally connected and this is one of the things we don't really often understand about our society is it forget tradition you know traditions would happen the past is that a lot of the business the economies in the society are very reflective of the lifestyles in the culture so they're completely on point in terms of the kind of foods and the needs of the people what are their pain points and what really works within this gassy environment you know so I mean I wrote gassy nomics the term gassy is that came from the word locasi it's not cool you know if you come from gassy or gassy boy gassy girl is really cool but it wasn't always I know it wasn't and now it's a really trendy and cool to be there and and that but I think that the business in those environments are very culturally astute and various due to the lifestyles and that's what makes them hugely successful but often it's also it makes it very difficult for corporates or other people to enter these markets because they don't have a clue of the cultural or lifestyle elements but it and again I go back to the sadness of it is that and maybe with our kids it's changing a bit and there's a bit bit of cross-pollination of this this whole culture thing but that we don't have a clue I mean well you were talking about so when I was doing some research and I read that this cosy economy is worth how much did you say roughly well I mean just the that's the food side is worth ninety eighty seven billion rand a year but then you have other sectors the spousal sectors with probably about 250 to 300 billion rand a year that was the one that stuck rental home a backroom rentals thirty billion rand a year in rentals that are earned by gassy people for backroom rentals and I mean I can carry on with hey I can carry on gassy mechanics you know and there are so many the muti industries with three billion randy year in herbal medicines muti yeah so this is this really huge sector but you know it's a bit like uber and Airbnb you know if you don't recognize it you don't because it's it's a multitude of small little businesses unless you're looking for it you don't recognize that there is this massive economy well when we come back I'd like to talk a little bit about the books and a little bit about how how do we sort of cross this divide how do we get involved as people who are maybe business people listening to the radio station tonight you know maybe there's people that haven't heard of you yet they like to get hold of your books we'll talk more about that when we come back my guest in studio GG Alcock his latest book Casianomic Revolution they are well worth a read I'm gonna dive into all three of them I'm telling you right now what's involved my guest in studio with me author speaker marketer GG Alcock so before the break we should become because you've written the three books and and I'm very fascinated about that and then we got some some messages in wanting to ask some questions as well so let's talk about how did you go from doing this you spoke about your marketing business and it seems when you when you spoke about it that that was an absolute passion so how do you go from that you know writing books so yes I'm in an hour was was as I said the first agency really in that space and we did some crazy stuff well you know I've mentioned the cheese slices excuse me we ran the so where to beach party for Captain Morgan to launch Captain Morgan with 400 tons of beach sand on a dam and so where to with ocean going yachts on the dam and beach buggies sounds like so much fun and and we did all of these things and and anyway so so with all the first book I wrote was called I'm third-world child white-born Zulu bread which was about growing up in a Zulu village and moving to the city and and very much about my my you know growing up as a Zulu child but then you know the the idea of gassy nomics came from we were the only people doing these crazy things in the township so I wrote about very much what were the opportunities in this gassy economy and some of the crazy case studies of stuff we did from the cheese slice to I created the biggest cooking show in Africa called the perfect sashayable show you know sashayable is for for Indians what what a curry is to Indians a sashayable is to Africans and the perfect sashayable show has been going for eight years biggest cooking show in Africa 10th most watch program on South African television and here again I created it for Unilever for nor Norox Roger Carrie Pada and Aromat and and it was huge one of the most successful marketing properties you know when I'm in the suburbs and I say to people I created the perfect sashayable show everyone shrugs when I'm in the township people think that I've they've met Jamie Oliver you know like you created the perfect sashayable show you know people love the perfect sashayable show so so the book us you know mix was about a lot of those case studies and and also just pointing out the the size of this economy and the opportunities in it then you moved on from that and now the latest one so so the first one third-world third-world child yeah not had tip to Johnny Clegg yeah because you are good mates with him yes and then it was carcinomics and then the third one now a carcinomic revolution yeah so carcinomic revolution is really about the revolution that is happening in that sector not only in South Africa throughout Africa and and you know I think with the books none of them were both neither of them were business books I mean they were written as as adventures a guess into this carcinomic sector and they're very anecdotal their stories about amazing people in the book there's a in carcinomic revolution there's a lady in downtown Joburg who sells 3,000 feet cook every single day for one round each she makes herself about 35,000 round a month as building a two-story house and so where to her husband and yet you walk past her just outside park station you walk past this lady not recognizing this is a person who earns about 30 35,000 random and she sells fit cook for a round each for a round each is 3,000 a day and then she sells cheese slices and Poloni and tea and coffee and but are these there is a difference between the Afrikaans fit cook and and the township there's a definitely a different yeah the township one's far tasting it is and then you put a cheese slice in it and then it's like generally smaller rounder and I don't know sweeter for some reason to me yeah that's I mean it's completely unique you can't compare it to yeah so anyway we am yeah and and so so the stories are the most amazing thing there these incredible stories about and so some of them were carcinomic revolutionaries these carcinomic guerrillas as I call them who were these small businesses really changing the way business was done throughout the continent and then they were the carcinomic counter-revolutionaries who were the businesses that completely destroyed value they were you know I used to write the the did you know is inside chappies bubblegum rappers that's true and and we had some wonderful did you knows but and they all had to be true but the point about that so I wrote a little bit and about my pet monkey which was called monkey which loved bubblegum which loved chappies and would go to the local trading store and steal the chappies and and then that led us to to chappies which basically pulled out of the informal sector and stopped focusing on it and destroyed half the amount of volume that they had because that was the company was originally chappelle ham free wasn't it was chappelle a creek then became Cadbury South Africa and then it was taken over by Cadbury's UK and another one was champion toffees again which is a brand that was huge and and they destroyed the value by pulling out of the informal sector and then the other side of the coin is there's a company called the Tolerum Group in in Nigeria that created the fifth biggest per capita instant noodle market in the world by getting Nigerians onto instant noodles they sell two and a half billion cases of instant noodles a year the biggest consumer brand in Africa is Indomie instant noodles not Coca-Cola it's not any other it's officially the biggest consumer brand and the eighth biggest consumer brand in the world according to cantor which does these surveys is Indomie noodles and and these guys really get the informal sector they they built their instant noodle business about understanding what is the biggest problem people have in food and the biggest pain point is cooking it is the cost of charcoal or paraffin or electricity or firewood collecting and instant noodles was the perfect solution to lower income economies and built this massive massive industry but why well maybe they are but the question that I'd like to ask is is why are corporates not banging down your doors asking you to help them because surely if they seeing this or is this what these books are leading to that that corporate South Africa kind of slowly waking up and going hang on a minute yeah so yes corporate South Africa is starting to and I've got a huge amount of interest there my big thing is you know people say wow you've got these amazing insights you created this cheese slice thing and whatever and it must be an in your insights and I said no it needs a brave client because to take the leap of faith you must know these are massive economies and people have done incredibly well like parliament out of them but to take that leap into an area that's unquantified that's invisible that's you know unknown to you and your business it needs a very you know I mean I am suggested to to one of the banks that they should have a funeral policy where they included a goat because a goat is a very important part of a funeral and the and the guy the marketing director said to me are you telling me I must go upstairs and tell the actuaries that they have to add a goat into our funeral policy I was like yes he's like no way they'll off me out the building you know so how do you change the way you do business and and this is true for the gigabyte economy you know the Ubers of the world and the Airbnb's of the world are disrupting a sector that doesn't know it sees it said wow look at how Uber is messing us up but but it takes him a huge amount of time to change their business model to adapt to it and and I find exactly the same it's incredibly frustrating but I mean we've been hearing for I don't know how long now in fact I had a discussion with somebody this afternoon on the way into the radio station who is saying yep business sucks business is bad this economy is going down the toilet and then you walk into the studio this evening going ah buddy no well let's look at the insurance in this insurance industry and the financial sector only targets people where they can deduct money using a debit order now there's call it four to five million people in this country who are formerly employed you cannot get a and I wrote about in gas economic revolution if you want to ensure your car and you want to pay cash for your insurance hmm you can't do it and so there's no pay as you go car insurance and yet all the insurers and the financial guys in oh in such terrible trouble they are not adapting their businesses to the sector and if they were adapting their businesses to the sector by being innovative they will completely transform the opportunities out there do you think part of the problem with South Africa and maybe even Africa is that we want we trying too hard to be first world when we really shouldn't aspire to it because ultimately I don't know we we yes but one step further we are aspiring to be formal first world we are not trying to understand informality in its various forms now my form is on the streets but as I said the gigabyte economy there the Ubers and the and the Airbnb's and many others are all about the same thing it's about this massive fragmentation of business and personalization ultra personalization of business throughout the world and the informal sector is even more that you know and and we don't know it exists we don't really quantify it we look for a business case you know I found on LinkedIn the initial presentation PowerPoint presentation that uber did and it's wonderful it's like six slides and they anticipated like 30 cars in San Francisco you know and you look at that and it actually says exactly that is that they didn't know how big this market could be would be whatever it might be and the same goes for the informal sector the first thing the CEO says to me he says okay what's the business case can you give me some research that proves how big this is and can you tell me how big the market is going to be for us Pamela Chislas has never said that to me they said let's try it and see and that's why I said you need a brave client this goes across every single one of these sectors throughout Africa but even you know South Africa we've been spoilt because we had we have such a large formal sector hmm yeah but I mean I'm just thinking now as you're talking I'm going hang on but even our government currently has not taken notice of this informal sector as you said largely invisible I mean could you imagine if they did that brought them into the tax started actually doing some incentivize I don't know I mean you seem to have a few more answers than most people have spoken to but surely well yeah I wrote extensively about the the role that governments should be playing and financial institutions in supporting these small businesses what we did with palm letters we supported small businesses and we found that most of these businesses we could double their turnover double amount of staff they employed by simple interventions none of them can get financing for their business everyone wants to they have no guarantee you know the lady selling Fed Cook in the streets of Joburg said why don't you invest more in your business and grow your business she said because I have no guarantee because tomorrow the city of Joburg could come and kick her off the street and so she doesn't invest in her business and my big things and and we we have to formalize those business I understand where the city is but you know throughout the world the government the governments and municipalities do not know how to regulate for Airbnb as an example we are we have regulations and policies that are based on the 1920s form of how cities are built so we don't make you know opportunities for these and if we did you know and my big push is government and municipalities have to look completely differently at these things if we we're not going to create a million one and a half million jobs like the ANC says in the formal sector some possible is never gonna happen I agree with any opportunity has taken the informal sector and growing it and formalizing it in in an informal way and if it is then these people that you see that everybody moans about that are eyesores on the sidewalks and that this and it's there suddenly they'll be taking pride in their little space of the pavement and suddenly things will start to change yeah you know there's a lady at a school in Tambisa who I was chatting to I said how long have you been selling here she said 26 years she sells food to the school kids I said 26 years she said yeah I've put two kids through university from this little table at the school now put that into perspective there's 12,000 township schools average township school has five mamas selling food multiply that by this lady earn 6,000 random month just give yourself how much money is in that sector they said to her do your kids come and help you here since they've finished at university and they can't find a job she's how this is not a job I said but it is a job she says no no no I work I don't have a job a job means that I would have to have a payslip and so so we need to change also how our youth look at what jobs are because they want a job and the lady in in downtown Joburg her kid went and got a job at Edgar's as a as a trainee and she says and I said how much does he make 35,000 random months like you do he said oh he puts two and a half thousand in his pocket every month well you do know in my my favorite one of my favorite expressions is job means just over broke because I'm a raving entrepreneur so I'm not a fan of jobs I'll be honest yeah we'll be back wrapping it up with Gigi and I got it say because we've now had a second person asking about Josie to cozy so I'm gonna have to talk about that when we come back great Gigi thank you so much for coming in but before you go I can't let you go yet we gotta wrap up tell me what is Josie to cozy so along with the informal sector my other passion is riding motorbikes and kind of incorporating the two elements I created an event which was the Josie from Joburg to Cozy Bay in northern Zululand and what they call him Sabuya Lingana which means that the earth is flat or even and so it's a motorbike event over about four days where we stop at Shabines along the way and we meander through Zululand and really get an experience of beautiful countryside but also a little bit of a cultural feel for it so how often does this happen only once a year it'll be in August but okay Josie to Cozy you'll be able to find on Facebook there's a Josie to Cozy Facebook page okay so what you bring you back and there's a there's a fee you pay and then off you go that's right and each night we carry your bags from place to place so each night we put you up in this fantastic lodge or enough a tent if you're on the economy one and we and in between you travel between these different places we give you a route and you stop along the way and you know a lot of the time the heart is getting people to the finish because they're stuck in Gogol Shabine I just think it would be brilliant for people from all works of life to be able to do something like that to just go out and experience and not and I know to a degree it's nice if you can get out there specifically if you're one of the privileged white boys and never been into a township getting to a township but it is a bit sanitized but to get into the actual real rural land and to see how people really live yeah and how warm and generous and loving and welcoming there are that changes lives you know it's incredible and every time in fact I took an American friend who very senior businessmen I took him around one of the townships the other day and at the end of it he said to me you know I thought I'd come back sad and miserable he says all I remember was the laughter and the warmth and the jokes and this is the thing is that we have these negative things about it's all sad and miserable yeah and there's a few poor people out there and that's terrible we should have even changed that but there's also lots of people who are living great lives and and we should be experiencing that both in the social environment from the Shisanyamas to the Shabines to to just understanding what life is like and people are incredibly warm and welcoming and you know what it's it's one of the things that I have noticed to be true so many times amongst African people the capacity for love and joy yeah I mean tragedy struck some of these people have a terribly hard lives there's always laughter there's always a smile there's always a song we could learn a whole lot yeah it's it's an incredibly optimistic society and often the humor is about laughing at yourself and making light of a situation it often makes it even more kind of evocative and deep you know wonderful Gigi if people want to find out more about you about booking you about Josie to cozy what is the best place to go now the best probably starting point is I have a website Gigi Alcock.com I have an email address Gigi at Casinomics dot co2z a or I've got a Facebook page Gigi Alcock Facebook page I've got a a Josie to cozy Facebook page as well and then I keep on very regular stuff on the Gigi Alcock Casinomics Facebook page on ongoing things about amazing stuff that's happening in the township it's a great great place to start there because from there you can link out so G G Alcock A L C O C K G G Alcock.com Gigi thank you so much for coming I want to hear more I need to know more where to from here for you just to wrap up well I sold my business Minnowa and I've joined the informal sector I'm a freelancer and my passion is very much about how to to grow those economies how to get government and municipalities I mentioned earlier to look at it but also to look at the corporate sector and how they can engage with that and help grow that sector grow those businesses create more opportunities because that is the future for our country it's not going to happen in the formal sector and you coined such a brilliant phrase and Afropolitan yeah I mean Afropolitan is a modern but very culturally African person that's that's the primary the typical person in our society that's what we're aiming for Gigi Alcock thank you so much I wish you all the best we're gonna have to have you back sometime in the not too distant future thank you