Retail industry barriers limit growth of small manufacturers in SACompeting in the FMCG space is a survival of the fittest - and the fittest are often the established giants of the manufacturing world who have oodles of cash flow to back supply-and-demand needs. Historically, manufacturing is an industry that has supplied employment opportunities as well as contributing to the economic growth of a country. It is a well-known fact that the majority of employment opportunities in South Africa arise through the growth of small to medium enterprises. © Cathy Yeulet – 123RF.com Research shows that nearly 90% of future jobs will be created by small and expanding firms. Presently, SMMEs account for 68% of private employment. This is a great incentive for larger retailers and manufacturers to support SMMEs, because in a cyclical manner it encourages consumer spending. People who are unemployed don't buy products, but that's not the only opportunity for big retailers to support small business. Smaller local brand manufacturers, while they may have a great product, battle to break the barriers that exist in the retail industry today. Without larger firms helping to break ground for SMMEs in the retail and manufacturing space, our market faces stagnation. Barriers facing small manufacturers
Let's not forget the little guy or the fact that opportunity comes in all shapes and sizes. While our local manufacturing market does face challenges, nothing is impossible. Working through partnership with retailers will only benefit both parties in the long run. For small and large enterprises alike, a good business model is their magic bullet for success. Retailers can access the innovation and creativity that local manufacturers bring into the marketplace; innovation prevents stagnation and keeps retailers in touch with their consumer base. For example, a recent article by the British newspaper The Daily Telegraph, revealed that it's been 45 years since a new product was introduced into the FMCG sanitation market. Frankly, that's a clear indication of how just boring product lines have become. Information sourcesConsumers are now more informed than ever and use various information sources, such as social media, not only to find value for money offerings, but also as the 'something new' that catches their interest. Big players need to remember that innovative thinking must be driven by what the consumer wants and not what we think competition dictates - something SMMEs are very aware of. Giving SMMEs the boost they need does not have to be a complicated process either. Big business must never become complacent and realise that there is an opportunity within our local market not only to improve offerings to shoppers, but also to stimulate the economy through job creation because of the support given to local manufacturers and SMMEs. |