South Africa - International Franchise Association

• Telecommunications Equipment; and
• Information Technology.
Market Entry Strategy Return to top
Because the South African market is sophisticated, entry should be well planned, taking into
consideration the following factors:
• The skewed demographic income distribution pattern, where ten percent of the
population earns 45 percent of national income;
• The price-sensitive nature of the majority of consumer demand;
• Distribution issues given that the large retail centers are spread over only five
metropolitan regions;
• Increasing consumer protection enforcement albeit in a still largely non-litigious
environment;
• The entrenched bias of a conservative market that sticks to known suppliers and
therefore requires sustained market development; and
• South Africa’s position as the pre-eminent stepping stone for developing most
sectors in sub-Saharan Africa: the marketing mix should anticipate this medium-term
option. However, the new-to-market foreign supplier will find markedly different
conditions when venturing northwards. This lack of regional integration relates
especially to financial services, trade documentation and road communication and
may have a significant impact on the cost of doing business.
A judicious selection of one of three low-risk entry strategies (representation, agency or
distributorship) is required by new-to-market entities. If you are selling to the government or
government-funded organizations, any local partner should be B-BBEE-compliant and be
aware of local procurement regulations.
In addition to this Country Commercial Guide, the Commercial Service offices in Cape Town
and Johannesburg offer many services designed to assist you in developing your market
entry strategy into South Africa. For a detailed description of these services please visit:
http://export.gov/southafrica/eg_za_036964.asp
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