Inner city a thriving shopping hub

Likened to the Dubai of sub-Saharan Africa

OVER the past 20 years Joburg has become an intense wholesale and retail centre for local hawkers and traders from all over sub-Saharan Africa. Fast-fashion worth billions of rand is sold annually in the traditional central business district and in 20 large Chinese shopping malls west of the inner city.

It is a vast, booming, low-end globalised trade that has transformed space and pioneered a retail phenomenon in the inner city for the sale of cheap clothing, shoes, household wares and accessories. Informal estimates based on bus passenger numbers and spending reported in the survey suggest that cross-border shoppers are spending over R10 billion each year in Joburg’s CBD.

A new study into cross-border shopping in the inner city maps the shops and the goods sold. Researchers detailed interviews with 300 retailers and 400 cross-border shoppers, as well as hotel managers and bus operators that service the flow of shoppers who travel to Joburg from countries including Mozambique, Zimbabwe, Malawi, Lesotho, Swaziland and Zambia.

The survey gave the first concrete insights into a vast trading web that operates in the cash economy and below the radar of formalised planning regulation. Yet, it is an economy yielding four times the annual turnover of an average regional-sized shopping mall.

The extent of the trade isn’t really known. And the scale of cross-border shopping is widely disputed in city offices and among property investors. But the survey shows that the City of Joburg should acknowledge that its inner city has developed into the shopping hub of sub-Saharan Africa. Some retailers have dubbed it the Dubai of South Africa. That ambition – that it be a global retail centre – should be embraced in economic strategy and in physical plans to upgrade the area.

The research focuses on 53 city blocks within the Joburg CBD, anchored by more than 3 000 shops. These are streets that bustle with street traders, ground-level shopping alleys and high-rise shopping centres. The shopping zone is close to rail, bus and taxi infrastructure. It is also served by cross-border bus depots and hotels.

The shopping hub is intense with throngs of pedestrians and determined shoppers crowding the streets on any given day. Buildings that have outlived their usefulness as office space and medical suites have been appropriated and converted at a rapid rate – primarily by migrant Ethiopian traders – to shopping centres hosting thousands of cupboard-sized shops.

This activity has developed over two decades. It started as a quiet encroachment of space in the mid-1990s when Ethiopian survivalist entrepreneurs, who fled their country to seek political asylum in South Africa, rented space in almost empty office towers. The space grew, first incrementally, and then in rapid bursts to become a burgeoning economic enclave created through the dramatic occupation and subdivision of space.

Based on the interviews, we calculated that the annual profit-takings in the city blocks we surveyed amounts to close to R7bn profit every year. But this is probably a major underestimate.

The sample survey indicates that about 70% of the shoppers contributing to these profits are cross-border shoppers. Each shopper is spending an average of R14 364 on goods per shopping trip. In addition, R3 497 is spent on other services, including transport.

A large number of bus companies are linked to the trade. On one day, 51 bus companies were operating from 19 sites. In that same week, a moderate shopping season of the year (mid-August), 465 buses – each carrying up to 60 passengers, many of these being shoppers – left Joburg for neighbouring countries.

But retailers and shoppers face enormous risks. The dependence on cash poses a big risk in an area rife with crime and corruption, and where lawenforcement agencies appear to be complicit in illegal activities.

Over 60% of retailers interviewed said they had been physically attacked or assaulted. And 38% had regularly “gifted” police officers.

For shoppers the risk is also extreme. A third of the shoppers interviewed had been exposed to violent crime. They travel in groups and hide their money. They depend heavily on the security and storage facilities of hotels and bus depots for safety.

These levels of crime are a major break on Joburg’s ability to maximise the benefits of these shopping trips. Shoppers are spending an average of 2.5 days on each trip. But they spend little on accommodation and almost nothing on entertainment. And they are too fearful to spend more time in Joburg than their shopping requires.

Most said they didn’t use the city’s restaurants, preferring to lock themselves in their hotel rooms in the early evening. And retailers said they would like extended shopping hours, but they close their shops around 5pm because of safety concerns.

Cross-border shoppers are international visitors to Joburg. Their visits increase the demand for services, products and good infrastructure – all of which attract jobs and investment in the inner city. They require and inspire new investment in buildings, maintenance, entertainment services, transportation services and accommodation establishments. They transform buildings and environments. And they attract and support new cultural enclaves and diversity.

Survey shows cross-border visitors spend R10bn a year