The South African retail market appears to be one of the sectors that has emerged relatively unscathed from the economic downturn with recent reports predicting an increase in retail sales for 2012. With interest rates likely to remain low for quite some time, consumers appear to be continuing to spend more than in previous years. According to the South African Property Owners Association (SAPOA), consumer spending is up 30% in the four years to September 2011. Regional and super regional shopping centres seem to be faring best with smaller community and neighbourhood centres following behind.
The South African retail market has also increasingly attracted the attention of leading British, European and US brands looking to expand their market footprint. Marco Cicoria, CEO of Brand Capital, a leading brand management company, believes international fashion brands are definitely seeing potential in the SA market.
“Generally during a recession, brands will look for a new market. South Africa is however one of the most price sensitive markets in the world and brands need to cleverly position themselves within this pricing structure, taking careful heed of the impact of exchange rates and import costs on retail prices. Ideally they want to position themselves in a similar category to where they are globally and can’t take the risk of out-pricing themselves in a new market,” he says.
No stranger to the retail sector having spent the last 15 years in fashion merchandising and buying and just about to launch one of Britain’s top mid-tier designer fashion brands, Ted Baker, in South Africa, Cicoria is intimately aware of the latest local and global retail fashion trends.
“We have seen a revival in brand purchasing with big brands performing well. In South Africa these brands are targeting consumers that are not spoilt for choice. Because there has been a ten year price war in the SA market with retailers driving to offer everyday, affordable brands, there has been little focus on the high-end consumer. The reality is that there are still affluent shoppers in the mid to premium fashion brand tiers. These shoppers generally travel extensively and can relate to international brands and are willing to pay a premium for quality merchandise.”
Cicoria says the secret to successfully taking a brand into any new country is having the correct local knowledge and market intelligence available. He says the South African retail market is unique because of its retail structure. The ‘suburban retail centres model’ – successful in SA – is very different to the ‘high street market model’ evident in most European and British cities. “Only through understanding the unique attributes that our malls offer can brands penetrate this market and this is where a local partner can help with brand positioning, retailer negotiations, pricing, import duties, partnering with financial institutions, marketing and the like,” explains Cicoria.
International impact on local brands
Just how the introduction of new international brands into the SA market will affect local brands is yet to be seen but Cicoria believes there is a market for both. “We don’t believe the introduction of these brands will affect local markets as much as we may think. Ted Baker for example is a quality, luxury brand but sold at an affordable price when compared to other premium brands. It has been highly successful in the UK because of this philosophy. It will be positioned differently to most local brands and even the existing international premium brands already in SA,” he says.
Ted Baker will be making its debut in South Africa at the end of March in four of the Stuttafords stores countrywide. “We advised Ted Baker to enter the market via a store-within-a-store route in Stuttafords as opposed to launching with a standalone store. “We felt it made sense for a relatively unknown international brand to leverage off a chain, such as Stuttafords, that already provides the platform for a number of other top international brands and attracts a discerning clientele. Stuttaford’s stores are strategically located around the country offering an excellent distribution opportunity for Ted Baker.”
So is this the opportune time to be bringing in a new brand? Cicoria believes it is. “The SA retail market and consumers are hungry for exciting international brands. We are in the midst of a consumer revival and now is the time for international brands to start testing the SA waters. It is a lucrative market if approached in the right way,” he concludes.
UCT GSB Joins Prestigious Global List Of Business Schools
The University of Cape Town Graduate School of Business (UCT GSB) and 14 other business schools from around the world have been re-accredited by the European Foundation for Management Development (EFMD) with the EQUIS stamp of approval.
The UCT Graduate School of Business (GSB) has kicked off 2019 on a high note with a seal of international approval from Europe’s pre-eminent business school quality and impact assessment body.
The European Foundation for Management Development (EFMD) re-awarded its European Quality Improvement System (EQUIS) to the UCT GSB recognising that the school has shown continuous quality improvement in line with international standards regarding governance, programmes, students, faculty, and research as well as internalisation, ethics, responsibility and sustainability.
“The UCT GSB is honoured to share the EQUIS accreditation with world-class business schools from around the world,” says UCT GSB Business Acting Director Kosheek Sewchurran. “It shows that our commitment to internationalisation as well our efforts to keep the business school at the cutting edge of management education in Africa is really paying off.”
The UCT GSB was the first business school in South Africa to achieve EQUIS accreditation back in 2001 and has successfully maintained this over 17 years.
“The accreditation aims to enhance standards in business education and promote excellence in management development and schools need to reapply for accreditation every three to five years, so it is an exercise in continuous self-assessment and improvement,” says Associate Professor Sewchurran.
“The process of business school accreditation is rigorous and time consuming,” agrees Dr Kutlwano Ramaboa, Director of International Relations at the UCT GSB.
“Schools must articulate their vision and mission, relevance and impact and be able to demonstrate that they are delivering what they claim to be delivering. This process can be useful because it helps us identify and improve on weaknesses identified,” she says.
The UCT GSB is one of 14 schools to be re-accredited and joins just 180 business schools across 44 countries who have the EQUIS stamp of approval. The school has been setting the pace for business education in Africa for more than five decades and is one of only three business schools in Africa to have triple-crown accreditation, which means that in addition to EQUIS, it is also accredited by the Association to Advance Collegiate Schools of Business (AACSB) and The Association of MBAs (AMBA).
“What sets the EQUIS accreditation apart, is a specific requirement regarding internationalisation, corporate connections and ethics. In these areas specifically, the UCT GSB performs strongly,” says Associate Professor Sewchurran.
For example, in 2018 UCT was ranked the top university in Africa by the Quacquarelli Symonds (QS) World University Rankings. The UCT GSB also regularly hosts top global events. It was the first business school in Africa to host the MBA World Summit in 2018 and in November partnered with the World Economic Forum (WEF) to bring the Young Global Leaders (YGL) conference to Cape Town for the first time.
“International mobility in today’s global business world is a key requirement and accreditations such as EQUIS help us to demonstrate international relevance, allowing us to attract international students and faculty. Perhaps more importantly, it also offers our students a chance to experience international contexts,” says Dr Ramaboa.
“The other key benefit is that because EQUIS assesses performance in a holistic way – looking broadly at the kind of impact a school is having on the world around it – it helps us to hone our offerings to develop the right calibre of leadership and management to drive the inclusive development that is needed on the continent.”
Tips To Help SMEs Prepare For The New Year
Jesse Weinberg, Head of the SME Customer Segment at FNB Business unpacks key steps that entrepreneurs should consider to ensure a successful 2019.
January is always a good time for SMEs to reflect on achievements and challenges for the past 12 months, while preparing for the year ahead.
- Review 2018 goals – business owners should review their short-term goals regularly in order measure progress and learn from their past mistakes.
Furthermore, short-term goals also help a business to determine if it is still on track to meet its long-term objectives.
- Get your finances in order – given the tough economic conditions, it is essential for businesses to ensure that their finances are always in order. Having a positive cashflow at the beginning of the year will help SMEs weather any unforeseen events that may potentially disrupt an unprepared business.
Weinberg says, cash flow management challenges are also a good indicator of deeper or hidden issues within the business that need to be addressed immediately.
- Stay ahead of competition – actively monitor the activities of your closest competitors and how the market responds to their goods or services. This will help you identify any shortcomings in your business, allowing you adequate time to address them.
For example, if you are still offering products and services in store while your competitors have successfully migrated to digital channels, it may be ideal to consider a multi-channel approach to remain relevant.
This also provides a perfect opportunity to disrupt or innovate by identifying niches within your market or industry that no competitor has tapped into yet.
- Meet customer needs – the most practical way to measure customer satisfaction is to communicate directly with the recipients of your goods or services.
Online reviews and social media are good platforms for getting feedback.
Weinberg says to remain relevant, sustain the current base and win new customers – SMEs should be agile and constantly reinvent their business models in order to meet evolving customer needs.
- Celebrate success – business owners often mistakenly focus on challenges and negatives when reviewing their performance and goals.
“It is equally important to acknowledge and celebrate the business successes for both yourself and staff. Not only does it boost morale, but reassures you that you are doing something right and it also motivates everyone. Moreover, the successes can be replicated and improved to steer the business for further growth,” says Weinberg.
“Lastly, once you’ve reviewed performance for the past year, it is essential to set new goals for the year ahead. This should involve reviewing or updating your original Business Plan to ensure that it is still relevant,” he concludes.
Africa’s Top 10 Tech Start-Ups Selected For #Africa4Future Accelerator Programme
Airbus and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) have announced the top 10 African tech start-ups that will take part in the latest Airbus Bizlab #Africa4Future accelerator programme. They were selected after an open public pitch event in front of experts, potential investors, the media and other stakeholders in Kenya’s capital city.
#Africa4Future is a joint business accelerator initiative of Airbus and GIZ’s Make-IT in Africa initiative together with the Meltwater Entrepreneurial School of Technology (MEST), a non-profit seed fund and pan-African organisation that brings together startups, entrepreneurs and the tech community, and Innocircle, the South African-based innovation consultancy.
The top 10 start-ups were selected from 314 entries representing 19 African countries that were received when the challenge was opened last October. These were assessed by a panel of Airbus and other independent experts.
The programme aims to encourage and support entrepreneurship in Africa. The continent’s young and increasingly techno-savvy population is likely to be the driving force behind Africa’s socio-economic development. The competition identifies Africa’s own pool of talented entrepreneurs using innovative aerospace based solutions to tackle the continent’s most pressing challenges such as transportation, agriculture and healthcare.
As a global aerospace accelerator, Airbus BizLab is ideally suited to help African startups transform innovative ideas into viable and valuable businesses. In doing so, it increases the aerospace industry’s engagement with hardware and software innovators and entrepreneurs in Africa while helping to nurture the establishment of competitive entrepreneurial ecosystems on the continent.
The Nairobi event kicks off an intensive 6-month business incubation and accelerator programme involving technical, commercial and mentorship activities in France, Germany and South Africa. This includes workshops and coaching sessions with Airbus experts, GIZ’s Make-IT in Africa, MEST and Innocircle coaches.
The programme will culminate with Demo Day events at the biennial Paris International Airshow and a special event in Germany from 19-26 June, when finalists will launch their products, define their collaboration with Airbus and announce their investment commitments in front of representatives from across the aerospace industry.
1. Astral Aerial (Kenya) – using drones for humanitarian cargo transport, surveillance and emergency response.
2. Cote d’Ivoire drone (Ivory Coast) – locally-manufactured drones for various applications.
3. Elemental Numerics (South Africa) – applies computational fluid dynamics techniques to the design of machines and components, ranging from aircraft to heart valves.
4. Lentera Limited (Kenya) – applying remote sensors to monitor and transmit environmental data to enable more efficient and smarter farming.
5. Maisha ICT Tech PLC (Ethiopia) – deploying locally built drones for delivering medicines, blood and healthcare items to remote and rural areas.
6. MamaBird (Malawi) – provides a platform to help Governments, NGOs and other organisations deliver vital life-saving supplies to remote communities.
7. Map Action (Mali) – a solution offering real-time online urban mapping to identify problems affecting water supplies, hygiene and sanitation.
8. MobiTech Water Solutions (Kenya) – an online real-time water monitoring solution that allows businesses, homes and water-service providers to manage their available water using an app-based dashboard and instant messaging.
9. Track Your Build (Nigeria) – a novel infrastructure management tool for construction and operations.
10.WiPo Wireless Power (South Africa) – offers reliable and convenient wireless power chargers for businesses, conference centres, airports, restaurants and other venues for the charging of mobile devices, laptops and drones.
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