South African Clothing Retailers Reducing Reliance on Chinese Imports

The South African flag is increasingly gracing labels on garments at major retail chains across the country. It is an attempt to boost the country’s clothing and textile sector.

More than half of the textiles sold by South African retailers are imported from abroad, according to the government, and nearly 60% of those imports come from China.

Retailers joining a government master plan to support local businesses say there are more benefits than just job creation.

Hazel Pillay, general manager of retailer Pick n Pay Clothing, said: “Being able to have the product made locally means you can actually respond to the customer’s needs more efficiently, which really is what every retailer wants – to move forward with the response more quickly.”

Pick n Pay Clothing is among retailers like Woolworth’s, Mr. Price and Truworth’s, increasing their offering of locally sourced products from 28% in 2019 to 40% today. The shift is now gaining momentum following global trade disruptions due to the coronavirus pandemic and record unemployment.

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Katekani Moreku, a young designer who was recruited to help with the effort,” said, “It got me a lot of attention and publicity. In times that we live in, with very high unemployment, I think it will have a very big impact that will create more jobs for all generations.”

Moreku estimates that his collaboration with Pick n Pay has created about 1,000 jobs in 2020, from manufacturing to digital marketing.

The South African government wants to see this with a target of 121,000 new textile jobs by 2030.

Further investment required

But retailers, including Pick n Pay’s Pillay, say it will require investment in skills training and entrepreneur support.

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“Yes, before the 2000s, the skills were readily available,” Pillay said. “And how [production] Moving to China, investing in skill development, investing in machinery, it all went away. But I think if we review where the local business is in another 10 years, we will certainly see a recovery in some of these types of products that are made locally.”

This growth is necessary as the retailer aims to source 60% of all textile goods locally over the next five years.

However, economists warn that setting quotas and targets alone will not be enough to rebuild the industry.

Dawie Roodt, chief economist at financial services company Efficient Group, said: “What you have to do if you want to get more investment in textiles and more localization in the textile industry or in any other industry is that the government will make a lot of things, for example, that the infrastructure is working properly, making sure it’s safe to invest in South Africa and stuff like that.”

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Regular power outages and ailing railways prevent local manufacturers from producing and transporting goods.

And there are other practical obstacles to closing the $3 billion trade imbalance between China and South Africa.

“Note that they have economies of scale,” Roodt said. “South Africa is a relatively small country compared to China. So I don’t think we’ll be able to really compete on a grand scale.”

But for aspiring designers, even a small boost in the local industry gives hope for future success.

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