South Africa’s Richest Man Says Continent Is ‘Retailer’s Dream’

SOUTH AFRICA, Capital Markets in Africa: Africa’s large and youthful population represents an opportunity for retailers to expand even as conducting business in many countries remains a challenge, according to Christo Wiese, the billionaire chairman of the continent’s biggest food chain, Shoprite Holdings Limited.

The potential is “a retailer’s dream,’’ Wiese, 74, who describes himself as an ‘Afro-optimist,’ said in an interview this week in Cape Town. “I don’t know how people ignore the fact that Africa has over a billion people and a young population.”

South African retailers such as Shoprite have been expanding on the continent to complement growth in their home market and access areas previously served only by informal markets. The company generated 12 percent of trading profit from supermarkets outside South Africa in the six months through December, according to a slide presentation on its website, and has stores in 15 African countries. While Nigeria and Angola are grappling with the effects of low oil prices, markets will eventually turn and the challenges to doing business such as local bureaucracy across the continent will eventually be overcome, Wiese said. 

“We know what the shortcomings are: infrastructure, bad governance in places,’’ said Wiese, South Africa’s richest man with a net worth of $7.7 billion, according to the Bloomberg Billionaires Index. “But they will be cured.’’

To read more on South African retailers expansion into poor communities, click here.

While 26 percent of the world’s population is under 15 years old, that figure rises to 43 percent in Nigeria and 44 percent in Ethiopia, Africa’s two most populous countries, according to data compiled by the U.S. Census Bureau. African countries occupied eight of the bottom ten places on the World Bank’s Ease of Doing Business Index for 2016.

Shoprite, which is scheduled to report full-year earnings on Tuesday, said on July 19 that sales growth had accelerated, led by gains in stores outside South Africa. While the company has sold its Tanzanian business, “we can always go back, and we will go back into East Africa,’’ Wiese said.

Wiese sold clothing chain Pepkor to South African furniture retailer Steinhoff International Holdings NV for $5.7 billion in 2014.

Source: Bloomberg Business News