Business Maverick

ELECTRICIY CRISIS

Retailers note surge in searches and purchases of alternative power supplies

Retailers note surge in searches and purchases of alternative power supplies

As rolling blackouts amp up, there’s been a rise in demand for mitigation measures, from rechargeable lightbulbs to integrated off-grid systems.

Mad keen for solutions to their energy woes, consumers are rushing for the checkout to stock up on alternative power supplies. With rolling blackouts amped up towards the end of last year and power disrupted daily since the beginning of 2023, retailers have seen record volumes of both search queries and orders.

Reality has set in for the South African public, who have little confidence in the new electricity ministry or meek assurances from the President that the energy crisis is being viewed as a crisis.

And business is certainly booming for providers of blackout mitigation products, explained Fredrik Zietsman, CEO of online retailer Takealot. “South Africans are becoming intentional in how they adjust to load shedding. On our platform, we’ve seen a surge in sales of load-shedding mitigation products, such as generators, inverters and uninterrupted power supply units. In fact, ‘UPS’ was the third most-searched term on the Takealot platform in 2022.”

With the country’s economy already on the skids, consumers are counting their pennies and the private sector is cashing in on demand for affordable blackout solutions.

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Takealot says it has prioritised sourcing and competitively pricing blackout solutions, with products priced from R30 to larger integrated options aimed at taking homes or offices off the grid. These may include rechargeable lightbulbs, emergency lighting, inverters and petrol generators.

Over the past two years, the online retailer has nearly doubled the number of brands that offer power solutions on its platform. Since December 2020, Takealot has seen a 3,000% gross merchandise growth in the sales of generators, inverters and UPS devices.

The platform has also enabled SMMEs to find new markets for their products by selling to more than three million online shoppers through Takealot Marketplace.

Zietsman said the platform served as a lifeline for businesses and consumers. “The biggest reason why this matters, in our view, is because it brings a greater sense of ease in doing business, and can also significantly decrease costs for everyone involved. If this opportunity is leveraged correctly, it could lead to solutions that empower consumers, businesses, and the national economy.”

In both its online as well as bricks and mortar stores, Leroy Merlin has witnessed a high demand for every component essential to solar power or power distribution. Products are selling quickly as soon as they are restocked, said Annalynn Pillay, Leroy Merlin category manager for electricity and solar.

“Even our online store, which supplies contractors and DIY enthusiasts nationwide, struggles to keep up with the intensity of the demand.”

While online sales have grown more than 200% since last year, Leroy Merlin’s in-store solar category sales have surged by 976%.

“Given the ongoing demand and anticipated load shedding increase in the coming years, we have established a three-year forecast at minimum.”

Massmart, which owns Game, Builders Warehouse and Makro, told Business Maverick that the group had seen a significant increase in sales of specifically solar-enabled back-up solutions typically comprising solar panels, inverters and battery storage.

Spokesperson Brian Leroni said Massmart’s customers were using solar as a seamless back-up to run selected circuits rather than as an off-grid solution.

“Increased interest in solar was notable from October 2022 and has intensified significantly during the past eight weeks.”

Customers are also buying solar products as a bundle deal.

Massmart’s most popular bundle consists of a 5KVA inverter with two 5,000KW batteries (customers on lower budgets sometimes purchase one battery), and three to six 455W solar panels.

Massmart’s entry-level pricing for a bundle is around R89,000, and would include a 5KVA inverter, one 5,000KW battery and six solar panels.  

Makro, Builders and Game are now also offering a R250,000 cash loan (subject to credit approval), in partnership with RCS, to assist customers to fund their solar projects.

Seizing the (dark) hour, Game has expanded its portable power supply solutions to focus on consumers living in more compact spaces. Generators are noisy and not conducive to good neighbourliness, and for tenants, installing a permanent solar fixture is not feasible. 

“Many of our consumers are looking for quiet, economical, sustainable power solutions, as their body corporates do not allow for the use of traditional generators,” said Andre Steyn, vice-president of Game. “We continue to invest in quality, affordable solutions for our customers. The new, portable solutions we have introduced are perfect for powering the essentials in any home in an environmentally friendly way – and are the latest addition to our growing load shedding solutions.”

These portable solutions, in store this month, include a range of Magneto Portable Power Stations, ranging from a 150W/133WH for R2,999 up to a 600W/537WH for R9,999.

Game is now also offering a Buy Now, Pay Later option with PayJust Now, which enables customers to spread their payments over three months, interest free, while receiving the goods immediately (subject to credit approval).

Katherine Madley, Game’s vice-president of marketing, added that gas stoves and other products were flying off the shelves. Since November, Game has reported a 43% increase in sales of two-plate gas stoves and a 63% sales increase for 9kg gas cylinders.

Number one category

Leading technology distribution company Syntech – whose plug-and-play 155Wh portable Gizzu power station was recognised by Stuff magazine as 2022’s “Loadshedding tech of the year” – said blackout solutions had become its number one category. Syntech founder Ryan Martyn said other tech categories had shown a big decline across the industry – a clear indication of just how under pressure the market and economy is. “Consumers are not necessarily spending more; they’re just spending on the products that they have to keep the lights on.”

Gizzu products are doing exceptionally well because they meet the basic requirements and are much more affordable than the other options, such as big inverters. The fastest-moving products are the mini UPS units, which keep internet routers running, and power stations, which have grown exponentially.

“We can’t keep up with demand and continue to ramp up our production. I think it’s difficult to grasp how big the market really is. But thankfully we are in a position now where many of our retailers are holding stock and there is enough coverage in the market to at least satisfy consumers who want to buy something off the shelf immediately.”

It had been interesting to see just how quickly consumers had started to understand the technical concepts behind power stations, he said, noting a big change in awareness, as consumers were choosing products that would suit their needs and were more aware of how much energy they were using in their households.

“So the concept of how many watts an appliance draws and how many watt hours the power station that they purchase can deliver – these are all concepts which consumers are much more aware of. It’s been great because the market is educating itself.”

Shopper reviews are invaluable. Martyn said Gizzu customers were reviewing products independently, posting them on YouTube and other social media, to see how they could be used effectively to solve daily problems, such as keeping the lights on and essential devices powered. 

“From that perspective, it’s really wonderful. We feel very privileged to have such an engaged and supportive community that’s really backing the brand. It’s also helped us to innovate products, because of the feedback from the market.” The market is also giving them feedback, which helps rapidly develop their range.

“Customers have said, you know, we love that these Gizzu products can power all of these wonderful devices, but actually I would like something that could keep my coffee machine going, or power the microwave.”

With the market giving feedback, Syntech is rapidly developing its range according to requirements. Over the coming months, expect to see new products that meet even more power requirements.

Buyer beware

Opportunity is also knocking for chancers. With an increase in the number of products and brands coming into the market, not all of them are by legitimate international companies; so compliance standards, testing and quality control can be in doubt. 

Martyn said Syntech had seen a big increase in the number of scamsters selling on the likes of Facebook Marketplace and advertising on Instagram. In most cases, the deals were just too good to be true.

“I’d like to encourage consumers to do a little bit of research, check out the independent reviews, make sure that the pricing is in the ballpark, comparable to other products and have similar specs in the market because we’ve heard of a couple of consumers getting really great deals, paying for the stock and finding out that it was a scam.”

As great as these products are, lithium ion batteries can be dangerous, which is why you cannot fly with a big power bank in your bag. 

Leroy Merlin’s Annalynn Pillay said that in the solar market, sales tactics were becoming increasingly aggressive, so caution had to be exercised when investing in such equipment.

“It is imperative to obtain a letter of authority for any equipment that will be connected to the grid. While some systems have proved to be effective in providing a return on investment, there are others that are unreliable and should be avoided. The increase in electricity prices makes solar a more viable option in the long run, with returns being seen within two to three years or even sooner, depending on pricing and the rate at which Eskom raises electricity prices.” BM/DM

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