Even though the amount of imports in key product lines have increased, South African retailers are focusing on a narrower approach to delivering customer value.
Dr Greg Cline, Head of Corporate Accounts at Investec Import Solutions, says this presents importers with new prospects in challenging economic conditions.
South African imports increased by 11.3 percent from 2016 to 2017, with almost 45 percent of total imports by value purchased from Asian countries and European trade partners accounting for close on 33 percent of import sales to the country.
“Previously, people experimented with a variety of import goods that reflected an enthusiastic online shopping environment. However, physical stores have shifted their strategies and started delivering more specific ranges built around product recognition and quality. Of course, contributing to this is the tightening of household budgets especially when it comes to luxury goods,” says Dr Cline.
People are more selective when making retail purchases than in the past. This reflects broader economic concerns especially around the rising cost of petrol and education, inflation overtaking general wage increases, and the like.
But amidst all these challenges, are opportunities for importers who seek to deliver better value to their customers. “South Africa is an import economy. With this in mind, companies need to examine the affordability of goods, identify buying trends, and compare it with what is available from an online perspective.
Digital solutions can improve import efficiencies by streamlining the supply chain and enabling importers to be more bespoke with their approaches.”
Many companies have entered to factoring their debtors book with financial institutions. With the ability to access capital decreasing as banks are increasing retentions, businesses are looking for partnerships that enable growth.
“This has seen companies move away from a one-dimensional way of importing to one that is more reflective of the economic conditions.
“Being more innovative enables importers to consider the business goals more closely and understanding the capital needs required to hit future targets. Those who are more open to this shifting environment will be the ones that are positioned strongly for the competitive market,” concludes Dr Cline.
Article originally appeared in Export & Import Southern Africa: www.exportsa.co.za