The food delivery industry has been growing at a rapid rate in the past four years, fuelled by the rise in e-commerce. South Africa has seen an enormous rise in food parcel deliveries as consumers opt for the convenience of ordering by phone and mobile devices.
This has seen a proliferation of light motorbikes fitted with panniers — or saddle boxes — containing fast food or all manner of parcels making their way to customers.
According to Conrad Botha, owner of Big Boy Fourways — which sells a range of motorbikes — there are an estimated 50,000 delivery bikes on South African roads, and the number is set to more than double in the next three years as more people shop online. However, the bikes are all imported, raising questions over whether the country should consider setting up a local manufacturing facility.
Craig Langton, founder and CEO of Hero Motorcycles, said in a recent interview with Business Times that he had approached the department of trade, industry & competition to discuss the possibility of manufacturing light motorcycles locally as “this will create a new manufacturing industry and hundreds of jobs across the country”.
The department acknowledged that discussions on this issue were ongoing. It said any movements on this matter would be guided by the South African automotive master plan.
“There have been a few engagements with potential investors regarding the local production of bikes or motorcycles. Unfortunately, we can’t share any details at this time,” the department said.
“The South African automotive master plan has primarily focused on the broader automotive industry, particularly on vehicle manufacturing, including passenger vehicles, light commercial vehicles and heavy commercial vehicles. While the growth of the bike delivery industry is noted, the master plan’s specific focus areas have not yet extensively covered this segment. However, the overarching objectives of fostering local manufacturing and industrial growth may provide a framework that can potentially extend to various segments of the industry, including bikes for delivery purposes, as they align with the broader goals of the automotive sector.”
The department said its manufacturing support programme (MSP) serves as a general incentive for the manufacturing sector.
“The MSP is designed to foster growth and development in the industry by supporting investment in new or expanding manufacturing projects. While no specific incentives are currently being developed for motorcycles, investments in this area can also be supported by development finance institutions such as the Industrial Development Corporation of South Africa,” it added.
According to Langton, the industry is growing fast and getting competitive, and requires urgent attention to address the influx of cheap Chinese bikes flooding the market. Moreover, there are no tariff duties imposed on imported light motorcycles, he said. Hero Motorcycles has partnerships in Kenya where it manufactures motorcycles.
Botha of Big Boy Fourways said the company sells an average of 100 delivery bikes a month, out of the 600 units sold countrywide by 80 dealers. He said products are brought in from China in a semi-knock down condition and final assembly takes place in South Africa. “Big Boy products are manufactured under OEM agreements in conjunction with leading Chinese motorcycle manufacturing plants. This allows the freedom to hand-pick manufacturing partners,” he said.
I don’t want to put women into that space. I want to make sure that we assist with the regulation that will govern this industry to be a safe industry and that the drivers are properly protected
— Nicci Scott, founder of Commercial Transport Academy
Though the industry is in its infant stages, it is revved up for exponential growth as e-commerce, the key driver of the delivery industry, is projected to double to R400bn by 2025, with the number of people buying online expected to reach about 40-million by 2027.
Major food and clothing retailers such as Checkers, Pick n Pay, Spar and TFG are fuelling the rise in e-commerce and have incorporated home delivery as a sales strategy. The entry of Amazon marketplace, and the continuing growth of the Takealot Group of companies, which includes Mr D Foods and Takealot.com — the country's biggest e-commerce retailers — are adding to the boom in the sector.
Many of the delivery riders are foreign nationals. However, some companies have launched initiatives to get South Africans into the industry.
Nicci Scott, founder of Commercial Transport Academy, plans to train about 300 women a year for the industry. But Langton said the sector was riddled with challenges. These range from exploitation of drivers to long working hours, unsafe motorcycles and safety on the roads. Scott said regulatory intervention could be required in the future.
She said there are “unscrupulous business operators capitalising on a growing industry. They are also capitalising on the fact that it’s very foreign-dominated. So these foreigners have very few rights.”
Scott added that companies are hiring delivery drivers as independent contractors and employ thousands of them without checking the roadworthiness of their bikes. “I don’t want to put women into that space. I want to make sure that we assist with the regulation that will govern this industry to be a safe industry and that the drivers are properly protected, because it is risky driving a motorcycle — you’re so exposed to people that don’t see you. We also need to create an industry that is gender-neutral.”
Botha said the legal framework for delivery services tends to be inconsistent, complicating operations and compliance. Many riders are classified as independent contractors, leading to questions about insurance, medical cover and worker benefits. Establishing partnerships with medical facilities for quick assistance in case of accidents would be beneficial.
He said setting aside dedicated lanes for scooters could enhance safety.
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