Retail in South Africa
In this paper I highlight the puzzle that althouth the underlying consumer bases (demographics, median income, etc.) in developing and developed retail markets differ sharply, why then are consumption patterns seeming to converge? I examine the case of South Africa, where demand for private label brands is converging with that of developed markets, and where South Africa is experiencing the fastest growth in demand for green consumption. I demonstrate that although the proportion of middle-class consumers is lower compared to that of developed nations, and despite much of South Africa's retail taking place in the informal sector, the growth rate of South Africa’s middle-class is immense and may explain not only the growth in demand for private label brands but also the increased demand for environmentally-friendly products. On the supply-side, I show how the rapid implementation of product labelling legislation has made it much more profitable for retailers with integrated supply chains to adopt a product strategy which focuses on private label brands. I present unique challenges and responses by competitors which are taking shape as a result. [Andrew Montandon. European Retail Research, 2014] [Link]
Consumers willing to pay more for sustainable goods converging around 40-50% in 2013.
Awareness of private label brands in South Africa has increased year-on-year by 2.5% in 2010.
