Consumer Culture In South Africa

The upsurge of consumer culture in Africa presents a compelling investment case for international companies from the “fat” countries, which are progressively looking at rising emerging-market wealth to offset sluggish growth in traditional economies. South Africa was described as the most established retail market on the continent. It also has more consumer spending power, after retail sales increased by an average of 3 percent a year between 2005 and 2012. According to global consultancy McKinsey & Company, by 2030, Africa’s top 18 cities could have a combined spending power of $1.3-trillion as the consumer culture grows. In South Africa, modern retail stores account for more than 60 percent of sales, while in some countries elsewhere in Africa,

• There will be increased competition between the different companies and countries. This puts extreme pressures on retail companies for example to be efficient and offer better products for customers.

• Increase in Foreign Direct Investment , from 2003 -2011 FDI financed projects have increased at a rate of 7.6% per year

• There will be free movement of labor where workers can move more easily from one country to another to market their skills and contribute to the economy.an example of this would be where the UK has hired nurses from India to fill positions in public hospitals that were available due to shortages.

Woolworths is an example of how a retail company from the “fat” country acquired Australia’s David Jones for 2.1 billion Australian Dollars in April 2014 to create a southern hemisphere enterprise that would compete with fast fashion icons such as Zara and H&M.

Woolworths is now one of the biggest department store retailers in the world. They have sent their staff to Australia for training and upskilling

Cotton On sends all their new recruits to Australia for training for

There is real danger of South Africa falling behind emerging and developed economies when it comes to on-line retail spend. According to the latest Nielsen Global Online Survey 2012/11, 6% and 8% of India’s and China`s population respectively, spends between 26 – 50% of their total monthly expenditure online. In South Africa we have one of the best platforms for on-line retailing but one of the lowest Internet penetrations and that’s due to skepticism about payments and fraudulent activity. We now have our own website and using the Red Square chain for cosmetics, C.N.A chain for major product categories such as Books, DVDs, Games, Stationary, Electronics and Toys and Boardmans Chain for Home living goods. We have increased education, made an easy to use website store, continuous promo activity, exclusive offers, more secure facilities for payments and during load shedding we encourage consumers via sms to make use of our on-line store. We have invested in systems, IT and an executive team to focus on our on-line business. We currently do 30 million rands a year with on-line and we budgeting to do 150m by