The Clothing Industry in South Africa in South Africa 2023

Challenges

Difficulty competing with the flood of imports on cost. 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. 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.

Introduction

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. Challenges 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.

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. Consumers face rising fuel, electricity, food prices and interest rates, which will continue to affect disposable income. A weakening economy and high levels of unemployment have seen South Africans adopt value conscious shopping behaviours which have led major retailers to opening a lot of stores in the low priced segment. The drive to source products locally has led to increased investment in capacity for local manufacturing and benefits to retailers in terms of sourcing products quickly and reducing their reliance on international supply chains.

Report Coverage

This report on the clothing industry in South Africa includes clothing manufacture and retail and discusses the size and state of the industry, progress on the masterplan, key issues and trends, notable players, and influencing factors such as the power crisis and ports backlog. There are profiles of 87 companies including major retailers such as Mr Price, Woolworths, TFG, Truworths and Pick n Pay, manufacturers such as Prestige Clothing and Trade Call Investments Apparel, and school and workwear companies including Gem Schooling, Grand Uniforms and Jonsson Workwear.

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.