Johannesburg becomes a hub for regional shoppers

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A new wave of African shoppers spend an estimated R10bn ($1.3bn) a year in South Africa according to a new report by Market Decisions, a local consultancy researching cross-border trade on behalf of South African airports authority ACSA.

Retailers in Johannesburg in particular are experiencing a boom as 0.5m shoppers from the rest of Africa annually buy a range of products and services in the city.

The report 'Understanding the Sub-Saharan Market and its Impact on South Africa' was commissioned by ACSA to better understand the profile of the growing number of visitors coming in from Africa, not just by air but by rail and road, and their purchasing needs. Early research suggests that the fly-in shoppers - accounting for roughly half of African retail tourists - now spend R7bn ($900m) per year in the city. Those who arrive by rail and road, account for a further R3bn ($400m) per year.

Market Decisions managing director, Sheny Medani, commented: "The figure in 1998, when it was measured by retail surveys was just R4.7bn ($600m). South Africa is still price-competitive and offers proximity.

"The main shopping areas are Gauteng, which comprises the bulk of [downtown] purchases. The two other main centres are Cape Town for textiles and clothing and Natal for shoes. Tourists from north of the equator buy mainly industrial and other goods and account for one third of the total spend. South of the equator visitors purchase all categories but mainly durable goods (appliances, electronics, personal care products and clothing)," said Medani.

Retail tourists are those visitors who visit primarily to shop for goods ranging from satellite dishes to refrigerators. South African tourism statistics show it as a significant slice of the national economy, equivalent to nearly one quarter of South Africa's entire export volume. Research shows that African retail tourists spend almost as much as tourists from Europe and the US.

"Johannesburg is positioning itself as a commercial hub and is remodelling itself as the 'Dubai' for southern Africa," said Medani. "As a country we are uniquely poised to benefit from cross-border trading and that is why President Mbeki is so focussed on the 'African renaissance' ".

• Market Decisions has conducted Economic Impact studies for ACSA, retail audits and other research projects for blue chip South African companies. Contact mktdec@iafrica.com or telephone +27 113 263 090.