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South Africa Clothing Industry Analysis - Drive to Source Products Locally has Led to Increased Investment in Capacity for Local Manufacturing
Research and Markets
5 min read
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Dublin, Feb. 19, 2024 (GLOBE NEWSWIRE) -- The "Clothing Industry in South Africa 2023" report has been added to ResearchAndMarkets.com's offering.

South Africa's clothing industry has shown resilience in the face of rising inflation, pressure on disposable income and global supply chain challenges. Clothing manufacturers face rising costs of manufacturing inputs, freight, fuel and wages and falling consumer disposable income due to an economy that is not growing.

Local retailers are focusing on local manufacturing to bring prices down and shorten lead times to bring fashion to the market. Government regards the clothing and textile sector as a strategic industry with a potential for significant job creation, and has introduced initiatives aimed at improving domestic textile products, processes, and delivery efficiencies.

Cheap imports continue to flood the market. Escalating power cuts limit retail trade and result in significant increases in operating costs. The breakdown of rail, port and road infrastructure, particularly the backlog at ports, threatens the industry which has stock sitting at sea while fashion and high trading seasons march ahead.

Opportunities

A growing young youth population ensures high demand for clothing.

Growth in online shopping means new companies can sell online without having store presence. If manufacturers can cut lead times and introduce short production cycles, they can establish a significant advantage for retailers who source their products locally. Low barriers to entry for designers and entrepreneurs. The shift to local manufacturing has the potential to create jobs.

Challenges

Difficulty competing with the flood of imports on cost.

The heavy reliance on imported materials make South Africa's clothing manufacture and retail vulnerable to international events, supply chain disruptions and exchange rate volatility. The rising cost of living, and unemployment levels have reduced the amount that consumers spend on clothing.

Power cuts causing huge additional costs for retailers to stay open and reduced sales as people stay away from shopping centres during blackouts. South Africa's relatively small size mean relatively less economies of scale.

Trends

Increased demand for and supply of cheap imported products due to financial hardship and pressure on disposable income. Increased local manufacture as retailers increase their localisation targets. Opportunities Quick response and better stock management resulting in more local manufacture.

Outlook

The trading environment in South Africa's clothing sector is expected to remain challenging in the year ahead with blackouts resulting in escalating costs and in many cases limited production and sales hours.

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