What do we know about South African consumers?
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. Their latest Gini Index recorded in 2013 was 62.5, with ‘0’ representing perfect income distribution and ‘100’ standing for absolute inequality. South Africa’s lowest earning 10% of households share only 1.2% of national wealth while the top earning families (10%) share more than half ie: 51.7 % of national earnings.
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.
What do people import to South Africa?
- Machinery and Equipment
- Petroleum Products
- Scientific instruments
Which are South Africa’s most favourite import partners? (percentage of total imports)
- Saudi Arabia(7.2%)
Which is the Prime Cargo airport in South Africa?
O.R. Tambo airport: O.R Tambo airport is in Ekurhuleni in South Africa’s economic capital, Johannesburg. It has location accessibility and connectivity.
Which are South Africa’s prime container ports?
Durban Port: Durban South Africa was the second busiest in Africa last year. It has a capacity of 2.6 million T.E.U.
Cape Town: Cape Town in South Africa had a capacity of 933,000 TEU. It was the sixth busiest on the continent.
South Africa’s import regulations
Items which are prohibited for import
- Cigarettes with a mass of more than 2 kilogram per 1000 units
- Counterfeit goods
- Goods which have violated the copyright law.
- Weaponry Explosives and Fireworks
- Biological substances and Poisonous chemicals and other health endangering substances.
- Prison made and penitentiary made goods
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:
- Investigations of increases in ordinary customs duties
- Reductions in ordinary customs duties
- Creation of rebate and drawback provisions
The Distribution set-up in South Africa
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.