An exercise by SA’s leading online classified platform, OLX, has highlighted that most South African households have money ‘tied up’ in unwanted goods.
Global economics has a knock-on effect on consumer goods pricing meaning that consumers need to make smarter decisions with their money. So OLX set out to prove that most households could dispose of unwanted goods to stretch their wallets for a holiday, or day-to-day expenses.
“We live in a material world and recent reports from financial and academic institutions show that consumers are more cash strapped than previous generations and less able to fund their families’ aspirations (Unilever Aspirations study). Always resilient, the current situation is forcing South Africans to become creative in how they make their salaries stretch. Buying less is the obvious solution, but selling your unwanted items or buying second hand is probably the easiest way to save money,” says Karla Levick, head of marketing for OLX.
One of the participants, Cindy Alfino, is married with three kids, owns an insurance brokerage and writing weekly for her parenting blog. The combined value of unwanted items in her household was R6,400 which they spent on camping equipment for the family’s holiday. Camping is an affordable holiday option for this season, offering even more value for money if you buy second hand equipment online.
The simple insight is that your money could be gathering dust in the back of a cupboard without you realising it. This experiment shows how you can simplify your life, clear up space and make cash which can then be put to use. “It’s like finding cash in a jacket you haven’t worn for a while” says Levick.
Jurie Senekal, a professional photographer and his girlfriend Mariska, a food stylist, plan to spend the R15,000 they will make on buying camera equipment. “R15,000 will help me to buy more up-to-date equipment. Also, previously the old equipment would just gather dust and it would also cost more as it is specified in our household insurance – so I would pay for cover for items we don’t use,” says Jurie.
The South African classifieds market is estimated at R7bn per annum of the entire retail sector worth R707bn (as per 2014 statistics provided by www.statssa.go.za). With households under pressure, consumer spending will be restrained with a change in shopping habits and consumers looking for bargains. Classifieds companies, like OLX expect to see a spike in the market share of online classifieds. “We believe that consumers are cottoning onto the benefits of classifieds shopping with thrifty behaviour as a long-term result,” says Levick.
The results of the experiment are not surprising, says Gerald Mwandiambira, acting CEO of the South African Savings Institute: “In the age of consumerism where people spend more than their means and live on credit to buy goods and services they don’t need, clutter (in the form of unused items) is the result. What most people don’t realise is that selling items they have standing around could help them get out of debt, save or pay for something they really need. Part of the debt restorative process is also to declutter your life and focus on a financial plan. As part of the budgeting process, selling unused goods often allows one to pay off debt. Many people have old cellphones, gadgets and appliances that can be used to free space and release cash. Many people end up asset rich and cash poor when they hang on to unwanted goods.”
“So the tough economic outlook should not entirely dampen the festive spirit. Consumers can be creative, dispose of unwanted goods and look for bargains when shopping for gifts, and what better place to shop than OLX?” says Levick.