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And they will keep on coming

1st Aug 2012 , Phillip Nutt; Wenco

Don't let East or West dominate African market, SA manufacturers told

South African footwear manufacturers have Africa on their doorstep as a potential market, says Phillip Nutt, and the industry doesn’t have to follow the way the footwear industry (and many others) has evolved in North America and Europe.

There is always a time delay between when I write an article for this magazine and when I receive the actual magazine with my contents therein duly cleaned up and made intelligent.

When I did get my own copy of the last issue, I was pleasantly surprised to see that my article ‘So now go forth and mulitply’ was nestled in with a number of articles about a national trade delegation visiting your shore and news of another trade show being scheduled.

In this new ‘severely challenged global order’, with free trade agreements being doled out by our politicians to all and sundry, you can certainly expect a lot more of these delegations to arrive to sell their wares and an intensely competitive atmosphere when you try to do the same elsewhere.

South Africa is not North America, but in sheer continental terms, I have never understood why your shoemaking resources have not taken the lead in being the dominant commercial force for shoeing the feet of Africa.

My African colleagues in other parts of Africa tell me that South Africa – aside from some chains – is still seen as somewhat aloof from most of the rest of Africa, and not one of them. I can almost equate it in my mind as to how the rest of South America looks on Venezuela as a people.

It seems sub-Saharan Africa is awakening its potential to be a manufacturing base. Both China and the United States are pouring in personnel to gauge the resource opportunities. For the Chinese, it seems to be about raw materials, as they are doing elsewhere in the world, and for the Americans, my gut tells me that alternative sourcing to China might be the ‘visual’ mission, but it could more likely be an evaluation for when the first Walmart or Starbucks will open in downtown Addis Ababa. North America is no longer a manufacturing base, and this next election will certainly be a battle of two totally different political perspectives on where America is going.

The situation is not unlike what you face in South Africa.

In terms of who will win the battle – i.e. imports versus exports in continental Africa – I`m putting it very bluntly when I say imports will win out.

I`m silver haired and long in the tooth now, and I don`t see things through the rose-tinted spectacles of my youth, when I thought all challenges and obstacles could be overcome with good, hard work. Now the rules of engagement have been changed.

If I look at North America, and particularly Canada, we now seem happy to just export raw minerals straight out of the ground. Manufacturing plants are closing daily, and we are outsourcing anything that is possible to be sent offshore to be done. Just yesterday, my HP copier packed up after 8 months, but fortunately I had a year’s replacement warranty. You take it back to your local ‘Office Stationary Giant’ who quickly tells you to use the warranty and get a new machine (no-one here today wants to check or repair anything). For the giant retailer, it is simply ‘Send it back to the supplier’.

I then had to spend the whole afternoon and evening, first finding that the HP service centre is in the Philippines (!). They told me I needed to get my machine back from the retailer. It took me a second call, which turned out to be to India (!!), and yet with that magical number code they give you, they also knew all about my machine. After a couple of hissy fits as I was just duplicating my efforts and being passed from one underling to another, finally I did get someone, who just by his immaculate English, appeared to be ‘One who made the decisions’, and all was settled. Incredibly, within the hour, I also received by email the full delivery news that my new machine was to arrive by UPS at my door within three days.

I guess the moral of the story is that such outsourcing must work, because if one tried to call our local government officials, you would be a) lucky if you actually ever got through; b) found anyone even interested in your problem, and c) something was done to rectify your problem.

Here in North America it truly is a battle for survival for anyone who works in the so called ‘Old industries’. There seems to be more life and more money to be made in the ‘New Industries’, but then look what has happened to RIM, the makers of the Blackberry, who have gone from being the darlings of Wall Street to the other end of the spectrum after Apple built a better ‘mousetrap’, so to speak. ‘New Industries’ seem to be a very stressful existence, but the ‘Old Industries’ seem to offer no existence at all.

It’s incredible how quickly things change. Take video rentals. Ten years ago, Blockbuster Stores reigned supreme. They now lie in bankruptcy, and our only other major retailer offering video rentals, Rogers, which seems to have the major monopoly on just about everything here, has closed down its retail video departments. Now even old codgers like myself, who have some computer literacy, have been forced into using cable systems to download my movies. Customers are bemoaning the loss of the ‘good old days’ like never before.

In this new global order, niche marketing is everything. I`ve just finished a project on injection moulded industrial wellington boots. It is incredible how big and how few global specialists now share this market, and they sell everywhere. I only have to say the word ‘Nike’, and it’s self explanatory as to offering.

Today, if you dig deep enough, you will find healthy businesses that specialise in even the most basic products – school uniform shoes, cheerleading shoes, wide fitting shoes, etc., etc., while at the mass mall level, thongs are being sold at 4 pairs for $10?

Where will South Africa go in terms of footwear? Will it be the Western trend, where giant American (and now European) discounters dominate retail with imported product and reduce local importers to relative serfdom, or will South African manufacturers take their knowhow to the rest of Africa – perhaps as consultants, perhaps as joint ventures – and be the force that can stand up to these powerful corporate forces that now ‘own’ the Western world?

If you think I`m overdramatic, then fight back, because the shoe industry, from my perspective, is changing like it has never been seen before, and hopefully in my next article I`ll review some of those changes for you. – Phillip Nutt [Email: wenco@rogers.com]

Phillip Nutt is the president of Wenco International Footwear Consultants, based in Canada. His intimate knowledge of South Africa comes from a fondly remembered stint with Bata SA in Pinetown. An outline of his services is available on his website, www.wenco.ca.




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