The current economic climate, with international brands landing on South African shores makes now the perfect time for local businesses to innovate to stay head of the crowd.
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Given the current state of the South African economy in relation to the global marketplace, many local businesses would view the current climate as one of doom and gloom, a time to slow down and batten the hatches against the impending storm.
I disagree with them. I firmly believe that the current climate, while immensely stressful for us all, in fact presents a wonderful opportunity for South African companies to move away from their reliance on importing raw materials and completed products, and find ways and means to locally develop and produce on-trend goods.
We’ve not had to gear for local innovation and development since the sanctions years, when legislation and policy prevented us from importing ideas and materials. Arguably, it’s been easier to just pay the little extra and import what we need over the last 20 years or so, rather than rising the challenge of creating and producing locally.
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Top quality and on-trend products
As import costs become increasingly prohibitive, with the longer term effects of the currency crash only likely to be properly felt after April this year, the time is ideal to build a strategy to achieve the perfect balancing act of having a top-quality, on-trend product that is well within the reach of local consumers.
The time is right to challenge local suppliers to meet your high standards. At Slo-Jo, for example, we’ve gone from dealing with three South African manufacturers a year ago, to currently dealing with 18.
We’ve adapted from being an organisation that depended on imports for 80 percent of its business, to a business that now only imports 40% of its raw materials – and has grown 30% per annum over the last three years.
Championing the local heroes
There’s another opportunity for local entrepreneurs that’s thinly disguised as a threat: The massive influx of international brands may make many local entrepreneurs wonder if their customers are going to flock to support the newcomers.
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I think that consumers will certainly give them a try, but as soon as they realise that these brands, which need to deliver results to international shareholders are charging premium prices they’ll go back to the local heroes.
It’s just up to the local heroes to maintain their relevance by keeping on top of trends and perhaps offering locally ‘lekker’ versions of international trends – and to be the heroes by finding the pricing sweet-spot that keeps them profitable in tough times, but that also keeps their customers coming back for more.
Essentially, my advice for surviving the tough times is to stop focusing on the drama, and rather focus on finding solutions – because they are there if you want to find them.