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Innovating The South African Mass Housing Market

Under challenging market conditions, a successful growth strategy in a newly developing market segment depends on identifying latent areas of demand within the population. This means more effective penetration of the mass market where the rewards for successfully balancing risk exposure with an aggressive market entry strategy can be significant, though not easily realised.

A three pillar approach which consists of:

1. Understanding the Non-Traditional Consumer Needs
2. Leveraging Employer Distribution Channels
3. Penetrating Through Sales Driven Promotion

and has proven effective in delivering efficiency, differentiation, penetration and reducing the time to market.


The key challenges in providing mass market financial services offerings are to address issues of access, affordability and indebtedness. Numerous obstacles restrict low-income consumers from participation in the market for financial services. Consumer perceptions of their own aptitude, the relevance of offerings to their personal situation and significant logistical inconveniences dictate that a message of accessibility, convenience and safety must be cultivated if consumers are to be convinced of a product’s relevance.

Additionally, the scarcity of disposable income, high levels of indebtedness, escalating building costs and the stipulations of the National Credit Act pose significant constraints to the provision of affordable financial products. Unsurprisingly, affordability ranks as being the single most important differentiator for the mass market consumer.

To address these challenges, an innovative approach, particularly in product development, pricing, risk assessment and customer experience is required.


Employers are a vital and underleveraged channel that can be cost-effective and low risk. Leveraging employers as a distribution intermediary can serve as an effective alternative to a costly retail expansion programme.

In an inherently high risk market, the employed consumer base is a self-selected target grouping that affords opportunities to contain risk through payroll deductions and pension security, thereby reducing defaults and improving profitability.

Such distribution partnerships require a heavyweight business development team with the ability to recognise potential employee benefit and retention objectives within group level management and to structure complex deals to achieve a confluence of corporate objectives. Once concluded, implementation expertise to realise the partnership’s objectives and ongoing strategic relationship management are imperative.


Early-stage retail sectors give organisations a unique opportunity to unify sales and marketing efforts for maximum effect. A number of sub segments of the mass market financial services sector were historically under traded and are yet to develop to saturation.

This represents a significant opportunity to allow sales efforts to drive business growth through the location of key geographical intermediaries able to facilitate access to largely untapped customer groupings.

Apart from the ongoing benefits of customers delivered through these intermediaries, such partnerships enable the identification of geographical customer concentration points. By prioritising reach over frequency in the advertising strategy, this in turn allows for targeted, efficient promotional tactics, able to achieve optimal reinforcement amongst a relevant and receptive consumer base.

The adoption of the three Pillar approach has been proven, and provides a framework for an effective market growth strategy that identifies the traditional and non-traditional elements which are unique to the largely untapped South African Mass Market.