Key in your market entry strategy is some market research. Of course there are reports on market size and market growth, but often these are general. Specific knowledge on how your product is perceived and what your competitions is, is harder to get but more valuable.
The people of South Africa are predominantly native with little migratory population. The total population of this vast nation is around 54 million people. Income distribution among this lot is poorly spread.
64% of South Africans live in urban areas of Port Elizabeth, Pretoria, Johannesburg, Capetown, Durban and Vereeniging. The nation’s middle income emerging market is mainly concentrated around these developed cities.
South Africa is a member of the World Trade Organisation and its liberal trade incentives are aimed at encouraging development and economic growth. The South African Customs Union allows free exchange of trade between four other countries and South Africa, namely Lesotho, Botswana, Namibia and Swaziland. Normally, most goods are imported into South Africa without any restrictions.
Some however like second hand goods require an import permit. Thus for such goods it is mandatory that importers must have the requisite permit. The International Trade Administration Commission(ITAC) aims at fostering economic growth and development by administering international trade. In certain cases however authorization can also be required from other departments which have control over goods. An example is the department of Agriculture. The validity of the permits generally valid for 12 months. The Tariff Investigations Unit administers three types of tariff amendments. These are:
The retail sector in South Africa has changed phenomenally of late. The rapid emergence of the supermarket and hypermarket formats have made it highly convenient to reach the local consumer. The shopping centres in which the hypermarkets are located are mostly found in the suburbs. They store consumer goods that can be self served. The traditional chain that included the wholesaler however has got disrupted due to the new model as the hypermarkets prefer to purchase directly from the distributor.
All outlets which compete with them are thus placed under price pressure. The low margins have achieved high turnover. Choosing the correct distribution channel is of utmost importance in any country and South Africa is no exception.
The South African market is open to trade due to the nation’s aspiration towards economic growth. Their import regulations are flexible and friendly towards most countries, making it a good and reliable trade prospect.
The best preparation for doing business in any country is visiting it. This way you can experience the culture, check the shops and build your network.
With Trip.com you can compare flights and also book your hotel.
Hotellook compares different hotel sites so you always have the best rate.
Localrent connects you to national rental car providers per country.
If you have a consumer product that you can’t sell directly from your home country to your end customer, you need at least one step in between. This can be a distributor (who also acts as wholesaler or importer), a big retailer directly, or it can be a large web shop. Let’s look at the pro’s and con’s of each option.
For a B2B product that is not a commodity or for customized solutions the story is different. Here sales needs to be done in alignment with the department that actually delivers the service or that determines the price case by case. Also then you have three different options.
As counts for any country: you first have to define the target group that you want to sell to. If these are businesses, then you can reach out directly through emails and targeted advertisements, e.g. on LinkedIn. If this arouses interest and gives a sufficient response rate, then you may have found an easy way to get the market’s attention.
If your target group is more diffuse, or is a consumer group, then you have to rely more on advertising such as on Facebook or Instagram.
With the tooling of our partner Instantly.ai you can define your target group, whether it’s 50 or 50.000 people. Send them a sequence of emails, directly in their inbox, for typically under 10 dollarcents per persoon.
First determine who are the end-users of your product or service. And where do they buy it now? The best way to determine the right entry strategy is to approach these parties. Would they consider your product or service as an alternative? Do they agree with the positioning that you have in mind? And what competitors are they buying from now? These data will help you determine the right strategy.
