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
