Shoprite spells out its Africa success formula

Becoming a successful exporter, distributor and retailer in Africa did not happen overnight for Shoprite Checkers. It was the result of a long-term strategy and investment in which many lessons were learned and much patience was required. But despite the many challenges – like labelling in Portuguese for the Angolan market, port congestion and endless documentation for customs and border crossings – the company has firmly established a foothold in the continent. “Going into Africa requires perseverance first and foremost,” said a Shoprite spokesman. “It is also not about making profits quickly. Successful operations require investment and long-term commitment to the countries you are entering. You also have to be keenly involved in monitoring the market and know when to expand.” He said the decision to export into Africa was therefore more about affordability than anything else. “You have to know how much pain you can afford to take and for how long. Formalised market research does not really exist in many countries and an educated guess is called for. Yes, you can send people to investigate the market and you can gather information, but you never really know until you try.” He said understanding that there was going to be success and failure was another important aspect to remember. Using South Africa as its base, Shoprite Checkers has been growing its African operations over the past few years, sourcing products both locally and internationally. “We invested in centralised distribution centres that are state of the art as we feel this gives us a competitive advantage and allows for a more efficient supply chain,” he said. “In Africa one is reliant on road transport. Transport in Africa is costly and it is a factor one has to take into account. Where we can we use local transporters within a country and we ship to the closest port and then move the goods by road, while airfreight is used as well – particularly for perishable products that have a short shelf life.” For Shoprite it is about making smart choices that ultimately see the goods moving more efficiently. “There are challenges in Africa that cannot be underestimated. Export compliance is a major constraint, with each country having its own set of rules and regulations. One has to be able to accommodate the rules of these countries efficiently and effectively. We have spent much time on this as we believe being able to do this well does create a competitive advantage.” Keeping up to date with legislation is also important. “For us success in Africa has been a long and slow process which included us taking control of our own supply chain. That is the only way we could ultimately contain costs to remain competitive.” INSERT Formalised market research does not really exist in many countries and an educated guess is called for. CAPTION Shoprite Zambia... perseverance and long-term commitment have paid off.