Key Facts
Local time - GMT +1
Language - English is one of 11 official languages
Local currency - Rand
The UK is one of South Africa's major trading and investment partners. South Africa is the UK's 22nd largest overseas market with exports (in goods only) totaling £2.2bn in 2006.
South Africa and the UK are natural trading partners, with English as the main business language and similar legal systems and business cultures. The EU-South Africa Co-operation Agreement has since 2000 made bilateral cooperation even easier, with existing tariffs being gradually phased out. Many products are already duty free. As well as being a major market in itself, South Africa is the gateway to southern Africa and its 185 million people.
Distribution & sales in South Africa
South Africa offers foreign suppliers a variety of methods to distribute and sell their products, including using an agent or distributor, selling through established wholesalers or dealers, selling directly to department stores or other retailers, or establishing a branch or subsidiary with its own sales force.
Wholesalers
Consumer goods requiring maintenance of stocks and industrial raw materials are often exported to South Africa through established wholesalers.
Retail organisations
Many exporters of consumer goods sell directly to South African retail organisations - including consumer corporations, department stores, chain stores, and co-operative groups of independent retailers - which assume the functions of wholesale buying, selling and warehousing.
Consumer retail
South Africa offers the full spectrum of retail outlets: neighborhood convenience stores; small general dealers; specialty stores handling a single product line (such as clothing, electronics, or furniture); exclusive boutiques; chain stores (groceries, clothing, toiletries, household goods); department stores; cash and carry wholesale-retail outlets; and co-operative stores serving rural areas.
Agents & distributors
In South Africa, the terms "agent" and "distributor" have a very specific meaning.
Agents
In the strict legal sense, "agent" means a person who, for and on behalf of a principal, either introduces a third party to the principal by soliciting orders from the third party, or concludes contracts with the third party on behalf of the principal. The normal reward for an agent is a commission, which is received from the principal.
 Key considerations in appointing an agent in South Africa are:
- You need to appoint an agent who knows your market well. The South African business sector is relatively small, and companies have established methods of procurement that differ from sector to sector.
- You need to consider national distribution. South Africa is a large country, with nine provinces. Smaller agents tend to operate provincially, as they do not have the infrastructure to support operations in other provinces. You may need to appoint an agent in each of the larger cities Johannesburg, Cape Town, Port Elizabeth and Durban - to cover each of the respective provinces. Larger companies who take on agencies often have an office in each of the major centres, making any agency agreement easier to control.
- For certain products, South Africa is a trading hub for the southern African region, and you need to consider whether your South African agent should handle business in these countries on your behalf.
Distributors
A distributor buys and holds stock of a product. In return, s/he is usually granted an exclusive right to sell the product in a particular area or to a particular type of customer. An agreement with a distributor is similar to an agreement with an agent, except that price and delivery terms will differ because the distributor is a principal. When appointing a distributor in South Africa, the same considerations apply as when appointing an agent.
For more information visit http://www.uktradeinvest.gov.uk/
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