It takes on average *36 months for brands to start noticing stability and consistency in the market.

I'm sure you are familiar with the saying, ’slow is smooth and smooth is fast.’

We have to showcase stability, consistency, and effort over a period. If the brand can show this over the period, your rejection rate at presentation would be significantly lower. The retailers would view you as a reliable source with consistent progress and resilience. Your growth does not need to be big over the period, it just needs to be consistent to convince the buyer. With the increased probability of listings, you will almost instantaneously increase your footprint. Buyers are more likely to start you on a higher store count with more favourable trading terms. This will be where your ROI increases rapidly. After 10 years in international trade, this point is particularly important to me.

(*36 months being the make or break point. This should be the limit to assess any possible future growth)

 

Chain stores are not willing to invest in any international brands that do not already have some footprint in South Africa

In the past retailers would rush to sign on an international brand because this gave them an edge over their competitors. Now the end-user has access to any brand they desire through group shipping making it easy and affordable. These retailers want to see what have you already done to market the brand and what traction have you already gained through customer feedback and other sales channels. The question we ask is how do you prove potential, without being given the opportunity? This ties back to the 36 months I mentioned above.

 

Most mid to high-end International brands fail within the first 2 years

This is primarily due to the loss of focus by distributors. Distributors and unfortunately some brand owners expect instant gratification. The South African market reacts very slowly to new brands. Brand loyalty in the cosmetic industry is high amongst the mid to high LSM. Loyalty is built over time. We all focus on the numbers instead of the product strengths and advantages for the South African market.

 

Outpriced in the market

Brand owners should be exactly that, brand owners. Your landed cost in South Africa should not have an *excessive margin added to that price. This will allow you to move volume, get noticed and be relevant to the South African market. All profits after representative cost should be for the brand owner. (The brand owner decides on what makes financial sense considering that the brand owner already has a margin on the export price)

 

Distributor's and Brand owner's goals should be aligned

The consensus amongst distributors is that brand owners are hasty for results. My suggestion is Brand owners should be actively involved in the operations of the brand in South Africa. This includes marketing, finance, distribution, etc. This should just be an extension of your current operations and should be treated as your own business. No one is more passionate and would give the brand the attention it deserves more than the brand owners themselves. Run your brand through consultants that you have full control over. This would broaden your perspective on just how intricate the South African market is. Use this method to grow your footprint in other African Countries from the wisdom gained in South Africa.

 

Distributors over-promise/underdeliver 65% of the time

The first sale to a Distributor is always the easiest. It’s the replenishment orders that become erratic. Prior to 2010 the chances of an international brand becoming a success in South Africa was high, due to the market having limited access to international variety. Now we are spoilt for choice. This has caused a shift in the retailer's criteria for selecting what makes the cut. You have to first be noticed before you get listed.

 

The Lower LSM category uptake is a lot faster route to market due to its appeal in the mass market.

This applies to every category where the biggest drawing card is price. There is no emphasis on quality and presentation. This generally links to products coming in from China and India although we have seen a significant increase in imports from Turkey in the past 2 years.

 

What we are offering to International Brands are the following: They may be selected in whole or in part.

• Legally registered company with us and 1 international representative as director.

• All local tax and import registrations

• All local trade certifications

• Dual signatories on large banking transactions

• Legal contract fees (Representative agreement)

• Warehousing

• Distribution

• Staffing

• Administration incl. shipping and logistics

• Merchandising

• Sales

• Online Sales

• Marketing incl. social media