Jacques Magliolo
WHILE local stores-listed companies fight for market=20 share on South African soil, there is a universal trend=20 for retailers to become world players. The Americans,=20 Asians and Europeans have suddenly realised the=20 advantages of the global village and they intend to=20 make the most of its conveniences.
Everyone has heard of easy access to goods through=20 telephonic credit card transactions, but imagine being=20 able to buy your exact brand of goods whether you are=20 in Japan, Ukraine, Mexico or Kenya. You may be thinking=20 that there is nothing new in that. After all, you can=20 buy Coke or Pepsi practically anywhere in the world.
Right! Now use that same logic to a situation which=20 enables you to buy anything anywhere at any time. It=20 may not sound glamorous to buy the same brand away from=20 South Africa. In fact, surely individuals want to try=20 something different while abroad?
The sudden prolification of foreign stores across the=20 world suggests that individuals actually do want the=20 same thing day in and day out. Something huge, worth=20 billions of dollars, is happening to the retailing=20 industry. Know-how and technical superiority have made=20 American stores K-Mart and Wal-Mart super retailers in=20 that country. Now these retailers are using their=20 expertise to move across borders to establish a strong=20 presence in countries as far apart as Mexico and South=20
Also found in South China is Makro, a Dutch wholesale=20 club operator, which has now become Southeast Asia’s=20 largest store group, with sales in excess of $2-billion=20 in 1994. Across the ocean, France’s toys manufacturer=20 Carrefour has opened new stores in Shanghai. This move=20 comes after becoming Brazil and Argentina’s leading toy=20
Indeed, the massive deployment of new retail outlets=20 worlwide is so intense that it threatens to collapse=20 the price stablity, which foreign retailers enjoyed=20 before the convergence of stores to new territories.
So, instead of simply supplying foreign markets with=20 goods, international retailers are moving into these=20 territories with their own brand names, much like Coke=20 and Pepsi did decades ago.=20
In a sense this protects retailers from supplying goods=20 to different stores and thus running the risk of=20 creating price wars against themselves. In addition,=20 upmarket private name brands sell for more, thereby=20 helping the local company — and ultimately the parent=20 group — to benefit from higher operating profit=20
South Africans have seen this trend develop here as=20 countries all over the world lifted sanctions.=20 International statistics show that international=20 companies are returning to the country despite=20 political nervousness towards South Africa.
The Washington-based Investor Responsibility Research=20 Centre shows that since the official lifting of federal=20 sanctions in July 1991, 60 United States companies have=20 returned. This brings the number of US firms invested=20 here to 164. In addition, the centre indicates that 15=20 new US and eight other foreign companies have re- entered South Africa since July. These include high=20 brand names like Novel, Apple Computers, Lotus and=20 Quickpath Systems.
CPC International, Honeywell, IBM and Sara Lee have=20 announced the reacquisition of some or all of the=20 equity in former South African subsidiaries.
And not even the sky’s the limit — retailers can now=20 provide access to their products even if the customer=20 is sitting in an aeroplane. These retailers are simply=20 not prepared to wait for the customer to drive to their=20 stores, but they are taking retailing to them, whether=20 he or she is in transit or at a holiday resort.