The internationalisation of South African retailers in Africa

Abstract

African markets are complex environments for foreign multinationals. The continent, which has recently attracted significant attention for its rich potential and growth prospects, presents a multitude of challenges for the South African retailers that have led retail expansion across the continent. This study seeks to gain a deeper understanding of the challenges experienced by these firms in expanding into other African markets, and how they have managed and nurtured this process. A qualitative research approach was used to investigate the experiences of senior decision makers, with insights from industry experts, in the expansion of firms into culturally and contextually diverse African markets. Ten in-depth interviews were conducted and extensive secondary data was analysed to build on constructs identified in existing literature, and used to identify new constructs in exploring the capabilities and expansion patterns of South African retailers operating in other African markets. This study confirmed that South African retailers have developed a variety of capabilities suitable for operating in African markets. The research further confirmed that these firms use SA Inc. as a country specific advantage in their expansion, and leverage their inter-firm networks to gain a better understanding of African markets and their consumers. The combined results from the research findings are summarised graphically to develop two strategic options for international retailers choosing to enter African markets. The study essentially provides a deeper understanding of formal retail in Africa, how South African firms have been leaders in this sector outside their home market, and how other international retailers might leverage this new knowledge.