By Charles Dhewa
Like many practices that are seriously misunderstood in developing countries, mass markets are full of distortions, faulty assumptions and wrong thinking. To assist policy makers, investors and ordinary people in getting past a number of lies and discover the real truth about mass markets, eMKambo has taken time to identify and expose the following lies:
- Commodities in the informal mass market are of poor quality. This is one of the biggest faulty assumptions. If it was true, informal food mass markets like Mbare in Harare, Nairobi mass market in Kenya and Makola market in Accra would not attract high income consumers. Supermarkets, hotels, restaurants and hotels would not be seen buying food from these markets.
- Mass markets are about low prices. That is not true because sometimes supermarkets can have lower prices, not to mention quality, than mass markets due to various reasons.
- Mass markets have one category of middlemen all called Makoronyera, for instance in This is another myth. Mass markets have more than seven types of middlemen, most of whom have been conducting honest business practices for decades, otherwise they would have gone out of business years ago.
- Mass markets do not use formal means of payment and terms of trading. In fact all forms of transaction modes and business practices found in the formal economy are also characteristics of mass markets. Many traders in the mass market provide agricultural commodities to hotels and restaurants on credit terms ranging from 7 to 15 days, the same terms given to farmers by some hotels and supermarkets. Commodities that are given to the formal market on such credit terms include butternuts, carrots, green beans, potatoes, peas and many others.
- Commodities traded in the mass market lack freshness compared to those traded in the formal market. In fact the opposite is true. The reason why high income earners visit mass markets is because they get commodities fresh from the field unlike commodities that would have moved from one cold room to the other over a week or more days. Consumer consciousness on freshness is increasing and most consumers prefer commodities from farm to fork than from farm to factory to fork. Long supply chains that are typical of formal markets result in some commodities losing freshness, quality and taste.
- Another decades old lie is that mass markets experience high commodity losses, especially of perishable commodities. In mass markets only poor quality commodities that would have been brought for speculative selling may be lost. High quality produce is rarely lost since everything is sold fast and cleared daily within hours. Any losses that happen are in proportion to the volumes sold which means they are very minimal. Conversely, formal markets can sometimes throw away high quality commodities due to low sales.
- Finally, there is a wrong impression that mass markets do not deal with high value commodities like grapes, strawberries, pears and mushrooms yet all these are traded in the mass market.
Practices that are unique to mass markets
Unlike the formal market where some companies engage merchandisers to promote their products in supermarkets, traders in the mass markets are merchandisers for farmers from whom they buy commodities for breaking bulk and reselling. The merchandising function has been embedded in the owner (trader). This is an advantage against formal markets where commodities are just displayed with the assumption that the customer knows what s/he wants. Trader-merchandisers have acquired intimate knowledge about their commodities are ready to share such knowledge with consumers. Such knowledge can include nutritional benefits and methods of cooking particular commodities. The trader-merchandiser-knowledge broker role is critical in mass markets where 100 traders can be selling one commodity, meaning everybody has to bring out his/her product’s unique selling proposition.
Another unique feature of mass markets is that they use informative advertising as opposed to persuasive advertising used by formal markets which border on deception and over-selling commodities as if they perform magic. Informative advertising provides benefits of each commodity. Forms of sales promotion in the mass market include allowing customers to taste products. Mass markets also have a wide product range and there is always a discount for volume purchases, for instance if you buy 20 cabbages you can get one or two for free. The more significant the volume purchases the more the discount. Mass markets have room for negotiation – all prices are negotiable and no commodity is returned to farmers due to poor sales like what is done by formal markets where perishable commodities like lettuce and spinach can be returned to farmers if not sold.
Mass markets as pathways of innovation
Most seed companies use demonstration plots to develop and assess the performance, size, shelf life and fruit filling (brics) of the their horticulture varieties usually over two to three seasons before releasing the varieties to farmers. Market acceptance for these varieties is also tested through formal markets without investing in getting feedback from the mass market. While formal markets give them feedback on how tomatoes and vegetables are performing in the kitchen and in sandwiches, mass markets are where performance is really proven.
For instance, when Charter Seeds began introducing tomato varieties in Zimbabwe, it started with 11 star varieties but it was in the mass market that Star 9009 and Star 9003 proved to be champions. Feedback from the mass market enabled the company to save resources and concentrate on the few most popular varieties. Star 9003 sold very well in Bulawayo market due to appropriate environment like temperatures and adequate levels of heat. In cold temperatures like Mashonaland East, Star 9009 has remained the performer, thanks to evidence from the mass market.
In another example, the mass market is refusing to accept all other jam tomato varieties except HTX14 which is performing better than Riogrand, Petrorosa and others. HTX14 has good fruit size while Riogrand has small fruit size. In addition to long shelf life and high yield in the field, HTX14 has good inside flesh (brics) which is required by processing companies. Besides not buying and experimenting with a wide range of varieties, formal markets do not sell jam tomato preferring green-house tomato whose uses are very narrow. On the other hand, mass markets order and sell by variety while formal markets do not ask about variety but are more interested in whether the tomato is produced in the open field or green house.
Decisions to buy seed and other inputs should be informed by micro climates as opposed to generic information. Unfortunately most farmers just buy any seed they see in the retail shops without adequate knowledge on whether it will perform in their area. It is more of guess work than informed decision and that is how farmers lose income through risks associated with wrong decisions.
