Businesses looking to expand into international markets must rethink their approach, as traditional export models are increasingly failing small and medium-sized enterprises (SMEs).
Nick Dreyer, founder and CEO of Made in RSA, says global demand for South African products is growing, but warns that conventional export methods are no longer viable for most local businesses.
Addressing Exporters Western Cape in Cape Town this week, Dreyer, founder of one of South Africa’s most recognisable brands, Veldskoen, said that despite growing the business from a 2x2m office in Cape Town into a global footwear brand selling in 35 countries, what appeared to be success was fundamentally flawed from an export perspective.
“We built a global brand, but it simply wasn’t scalable,” he said.
“The biggest challenges were supply chain complexity and the cash cycle.”
He explained that the conventional approach of placing inventory in multiple international markets tied up capital and exposed exporters to significant risk.
“You are effectively betting on demand in each market without certainty. If you get it wrong, you carry the cost.”
Dreyer said the global environment was increasingly favourable for African exporters, but the continent lacked the commercial infrastructure needed to capitalise on rising demand.
“It is Africa’s moment,” he said, pointing to demographic trends, including the continent’s young and rapidly growing population.
“By 2050, one in four people globally will be African. That is going to define future consumer markets.”
According to Dreyer, the traditional export framework remains too costly, slow and complex for most South African businesses.
Also speaking at the event, Linda Bird-Duxbury, marketing director at International Trade Consultants, provided exporters with a legal and procedural update on the current status of the African Growth and Opportunity Act (Agoa) amid continued uncertainty around US trade policy.
She said that while South African exporters remained eligible for Agoa preferences, the broader environment had become increasingly difficult to interpret because of rapidly shifting geopolitical developments, executive actions and legal challenges in the United States.
“Everybody keeps asking what is happening, but the current geopolitical processes are very difficult,” she said.
“Even with a crystal ball, I cannot tell you what is happening.”
Bird-Duxbury cautioned exporters against relying on headlines or hearsay, urging them instead to focus on statutory processes, tariff schedules and the legal basis under which duties were being imposed.
