Residents of Tembisa township, east of Johannesburg, recently welcomed the very first KwaMakhi store, a new Clicks-owned smaller format store targeting low-income consumers.

The first KwaMakhi store, situated at the Tembisa Megamart Mall, marks the latest push by Clicks Group to capture a bigger slice of the R900 billion-a-year township consumer market, which is also being heavily contested by foreign-owned spaza shops and local supermarket chains like Shoprite, Pick n Pay, and Spar.

Nearly 22 million people reside in 532 townships across South Africa, making townships a gigantic consumer market.

This week, Clicks opened two KwaMakhi stores in the Western Cape, one in Khayelisha and another Cravenby , taking the tally of KwaMakhi stores to three.

The retail healthcare and beauty group plans to launch 10 of these mini-Clicks stores before the end of this year.

Clicks Group CEO Bertina Engelbrecht says the KwaMakhi brand was created after the retailer recognised that large traditional Clicks stores could not be put in every township, so a new pocket-size store was needed for this task.

“KwaMakhi stores are considerably smaller, allowing us to bring a differentiated customer proposition, store format and merchandise mix tailored to a very specific customer,” explains Engelbrecht.

At approximately 280m² to 350m², KwaMakhi is a “Baby Clicks” tailor-made for densely populated neighbourhoods, unlike the larger traditional, pharmacy-led Clicks stores that are commonly found in upmarket suburbs and towns. A traditional Clicks store is way bigger than KwaMakhi in size, averaging anything between 550m² and 1,500m².

“In areas like Alexandra or Soweto, for example, Clicks is limited to perhaps four or five stores. With KwaMakhi, we could open around 10 stores in the same area. In other words, we can go faster with the KwaMakhi brand simply due to the many more geographical areas open to us,” says Engelbrecht.

Unlike traditional Clicks stores, which have clinics and pharmacies inside, KwaMakhi stores will be distinct, focusing only on selling affordable and lowly-priced everyday essentials like baby products, front-shop healthcare products, beauty, personal care and household essentials.

Engelbrecht expects customers' average basket sizes at KwaMakhis to be smaller than those of Clicks, but the everyday-low-price essentials are expected to lead to significantly higher transaction volumes at KwaMakhis.

KwaMakhi will leverage and piggyback on Clicks’ sophisticated distribution infrastructure and supply chains, putting the retailer in advantageous position to quickly roll out the low-cost “Baby Clicks” across South Africa and potentially the rest of Africa.

“We believe KwaMakhi has the potential to become far more than a South African retail concept. While our immediate focus is on building a successful business locally, we see long-term opportunities for the model to expand into Africa,” says Engelbrecht.

In its 2025 Integrated Annual Report, Clicks reported that 247 stores — approximately 24.9% of its 791 store portfolio — are in areas serving lower-income customers. These stores generate 23.7% of Clicks retail turnover. The introduction of the KwaMakhi brand will further boost revenue contribution from the lower-income market segment.

In the pharmacy market segment, Clicks competes directly with Dis-Chem, which also has a presence in the townships. Both Clicks and Dis-Chem stores in the townships are still heavily concentrated in shopping centres.

But the smaller KwaMakhi stores are ideal for placement in locations outside township shopping malls, where they can compete head-on with spaza shops and independent general dealers.

The smaller store concept or spaza-style stores are not new in SA. Shoprite has for years operated Usave stores, some of which are run out of shipping containers. This spaza-style expansion is likely to further entrench the dominance of SA’s grocery retail market by major supermarket chains like Shoprite, Pick n Pay, SPAR and Woolworths.

A report published in 2019 by the Competition Commission found that formal retailers collectively controlled 72% of the formal grocery retail market. The report further found that the formal retailers were benefiting from high entry barriers such as exorbitant rentals and exclusive shopping mall leases.

KwaMakhi expected to squeeze spaza shops

The launch of KwaMakhi comes at a time when SA is grappling with rising social instability caused by high unemployment and concerns over illegal immigration. Townships are an epicentre of this social instability with residents calling for closure of foreign-owned spaza shops, which dominate the R180 billion-a-year spaza shop market.

Some township entrepreneurs have warned that KwaMakhi poses a threat to existing township retailers, which could be wiped out by the new mini-Clicks stores.

Vusi Vokwana, founder and CEO of Kasi Catalyst, a township innovation and advisory platform, believes Clicks should have taken a more wealth-sharing approach by licensing some KwaMakhi stores to township operators or anchor existing spaza owners into Clicks' supply chain instead of being profit extractive.

She argues a more equitable approach would have scored Clicks enterprise and supplier development (ESD) points on its broad-based black economic empowerment (B-BBEE) scorecard.

“Instead, KwaMakhi is company-owned, company-operated, and structured to win market share directly from the traders who've held these markets together for decades,” says Vokwana.

But Engelbrecht says Clicks is investing R3.5 billion on its ESD programme to enable black people and local businesses to participate in its supply chain.

She points out to the heavy investment the retailer is making in contract manufacturing, whereby it is sourcing products from private label suppliers. However, companies that want to supply to Clicks must ensure their products are approved by the South African Bureau of Standards. Prospective suppliers must also be registered and tax compliant.

“All the products you see in the shelves of this store (Tembisa KwaMakhi) are manufactured by South African companies,” reveals Engelbrecht.

Pressed to reveal if Clicks was considering to open up KwaMakhi to franchising, Engelbrecht says all KwaMakhi stores will be corporate-owned for now.

“Franchising is not part of our thinking at the moment, but I don’t want to rule it out in future. We are still setting up this business,” she explains.

“When you think about doing something like that, you first have to prove the business model’s economic and financial viability. Franchisees want to buy into proven models because they are investing their hard-earned money.”

While all core Clicks stores are corporate-owned, the retailer has brands in its empire that are franchise model-based. For instance, Clicks owns beauty salon chain Sorbet, which operates on a franchise model.

Sorbet operates Sorbet Man and Candi & Co outlets, some of which are operated by franchisees.

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