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"Foreign brands aren't going to replace the price point that's feasible for most South Africans, but they can be a destination shopping location, or a novelty," she says. Nteta predicts that if global brands are looking to become the kind of lowest common denominator shopping destination, cost will be prohibitive. With more than 3,000 stores in 53 markets (and plans to increase that number by 10-15% per year), H&M has a noticeable dearth of stores in Africa and South America. While brands generally remain tight-lipped about their global expansion plans due to intense competition, a look at their existing trajectory can be instructive. It remains to be seen, however, if the gleaming international stores cropping up in Cape Town and Johannesburg are meant to simply add cache to brands' identities or to serve as an entry point to the continent at large. By 2030, the combined spending power of its top 18 cities is expected to be $1.3tn. Or, if they just want brand presence, they put specialist stores in a high-end shopping mall."Īfrica undoubtedly offers commercial potential. "The trend of international retailers coming into South Africa has been either to partner with an existing retailer if they want a large geographic footprint. Though he can't speak specifically on behalf of any of retailer, Lawrence says that these large-scale shopping centres often serve as a starting point for international retailers. Michael Lawrence is the executive director of the National Clothing Retail Federation of South Africa (NCRF), which represents some of the country's top retailers including Mr Price, Truworths, and Woolworths, (NCRF members are biggest purveyors of South African-produced products). Between 20, the nation went from having 239 shopping centres to 1,443, according to market research (pdf) organisation Urban Studies. "A lot of the trends you see in Europe don't ever make it to our shores because we tend to be not a very fashion conscience society."ĭespite these clear hurdles, at least one of the reasons these global retailers are setting their sites on South African seems clear: it's a nation that likes to shop and they seemingly like to do so in the style of American mega-malls rather than European high streets. "Mr Price is so good at being on trend and that the majority of South Africans are quite conservative and price conscience," Nteta says. She reasons that Mr Price's intimate knowledge of the market's varied taste gives them a competitive edge. Thithi Nteta is one of South Africa's most popular fashion bloggers as well as a brand consultant and stylist who has previously worked on brand partnerships with both Mr Price and Topshop. In addition, because foreign brands don't have a domestic supply chain, their ability to employ a quick response model is not as strong as brands like Mr Price, which can have new trends on shelves in a matter of days. Importing wares from Asia or Europe will result in a nearly 45% duty. South Africa has some of the highest import duties in the world on finished textiles. The question is whether they can do so at a price point that is feasible and on trend for the economically and culturally segmented South African market.ĭespite choosing the continent's most robust retail market to open their first stores in sub-Saharan Africa, these global brands will still face endemic challenges.
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Major international brands such as Zara, Topshop, Forever 21 and H&M are beginning to tap the South African market, and presumably looking towards the rest of the continent too.