It is a Monday morning and traffic is heavy in Johannesburg. Our team is in the city for a tour of Chinese Factory Shops analysing the various goods sold by Chinese entrepreneurs. Our first stop is the China Mall in downtown Joburg. Its a busy centre with hundreds of shoppers trying out or buy various goods for resale.
On offer are various electrical appliances, clothes, hair products, shoes, handbags, plastic chairs and umbrellas. The most popular and fast moving goods are clothes bought for resale by South Africans travelling from as far as East London, Port Elizabeth, Mbombela and Polokwane. Foreign immigrants are also mixing and mingling in the crowded place ordering shoes, clothes and handbags. Zimbabweans, Tswanas, Mozambicans, Malawians, Swazis are also in the mix with trolleys full of goods which are bought strictly on cash.
Welcome to Chinese Factory Shops where goods are imported into South Africa from one of the biggest trading partners of South Africa-China! In 2017 South Africa imported goods worth $12.8 Billion from China making it the top import country for the rainbow nation. The trend of imports from the vast country continues with no other country threatening its pole position.
Evidence of the imports is best illustrated by the factory shops owned by thousands of Chinese entrepreneurs who ship thousands of containers of goods every month. They have the largest presence in the commercial city of Mzantsi and we were there to witness what exactly happens at these shops.
We visited more than 5 Chinese shopping centres and were impressed by how China is helping the growth of entrepreneurship in the region. They have huge discounts for clients buying in bulk (usually in boxes). Shoes cost from as little as R70 and resold from R150 and above in South Africa and more mark ups added for neighbouring countries. Dresses have price tags of R80-R120 and being resold after adding mark ups of 60% and above.
We observed interesting business models of entrepreneurs taking photos of dresses and shoes, adding a mark up and sending the photos to clients and asking them if they are interested. Positive confirmations resulted in deals being sealed with goods being purchased per order. What an efficient way to conduct business-buy goods with a ready market!
Some entrepreneurs live in Joburg and conduct deals with with clients in the country and neighbouring countries. After purchase the goods are send to clients and for neighboruing countries, they are send by bus with clients collecting them the following morning.
The big question we asked is whether its viable to buy goods from China buying airplane tickets and adding accomodation costs…or its better to simply buy from South African Chinese Shops?
This is the question we tackled in our latest book ‘Business Opportunities for South Africans’.
