Covid-19 led eCommerce revolution



The Covid-19 crisis has redefined the retail playing field.&nbsp; This has seen retailers scrambling to accommodate changed consumer behaviour as shopping surges online.&nbsp;&nbsp;



The pandemic has exposed the precariousness of a solely bricks and mortar model.&nbsp;&nbsp;According to a recent report by&nbsp;<a href="https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-south-african-consumer-sentiment-during-the-coronavirus-crisis" target="_blank" rel="noreferrer noopener">McKinsey</a>,&nbsp;consumers expect a relative shift to online shopping in most categories in the short term,&nbsp; driven primarily by a sharp decrease in in-store shopping. In the longer term, 40 percent of consumers plan to increase online shopping once the crisis is over.



Fear of infection drives move to online



“Previous epidemics have foreshadowed this online trend,”&nbsp;&nbsp;says Derek Cikes, Commercial Director at buy now pay later fintech, Payflex.&nbsp;&nbsp;



“The<a href="http://weforum.org/agenda/2020/05/digital-payments-cash-and-covid-19-pandemics/" target="_blank" rel="noreferrer noopener">&nbsp;SARS epidemic in 2003</a>&nbsp;expedited China’s path in launching digital payments and eCommerce in the country, creating a permanent shift in consumer behaviour.&nbsp; Similarly, the Coronavirus has caused a marked change in South Africa’s consumer behaviour and habits, with social distancing, hygiene measures and self-quarantine now integral parts of our everyday realities,” says Cikes.



With the crisis expected to remain for the foreseeable future, these behaviours are anticipated to become further entrenched and remain even as the crisis eventually ebbs.



Shopping:&nbsp; an altered reality



Shopping is no longer a leisurely, sensory-filled experience.&nbsp; Instead, retailers have replaced sampling of beauty items or delightful food temptations with an antibacterial touch averse world of hand sanitizers and plexiglass barriers.&nbsp;&nbsp;



This interaction or rather fear of interaction is driving new shopping behaviour, with consumers opting for the safety and convenience of eCommerce. And retailers are hastening to adapt to what they view as lasting changes in the way that people choose to shop as millions of consumers choose online as their preferred medium of shopping.



Epidemics’&nbsp;impact on retail



According to a&nbsp;<a href="https://public.tableau.com/profile/salesforcecommercecloud#!/vizhome/SalesforceShoppingIndex/SalesforceShoppingIndex" target="_blank" rel="noreferrer noopener">Global Shopping Index</a>&nbsp;published by Salesforce, the number of unique digital shoppers rose 40% year-over-year for Q1 2020.&nbsp;



In a South African context, 29% of online consumers say they are doing far more shopping online than before the coronavirus outbreak while 65% say they are visiting physical stores less, according to a&nbsp;<a href="https://www.nielsen.com/za/en/insights/article/2020/overcoming-online-shopping-obstacles-amid-lockdowns-in-africa-and-the-middle-east-is-not-only-retailer-driven/" target="_blank" rel="noreferrer noopener">Nielsen study</a>&nbsp;of 10 markets in Africa and the Middle East, including South Africa.&nbsp;



“The pandemic has fast-tracked trends that were already budding in the eCommerce space including digital and alternative payments.&nbsp;The 40% increase in shoppers and 25% increase in eCommerce merchant sign-ups to our platforms highlights this monumental shift towards digital as an increasingly preferred avenue of shopping and transacting,”&nbsp; says Cikes.



Cikes says the increased availability of click-and-collect models, digital payment models like buy now pay later platforms and other alternative payment options,&nbsp; as well as faster delivery models, are anticipated to further fuel this online revolution.&nbsp;



Global players wake up to eCommerce opportunity



Major tech and retailer stores are waking up to the huge potential of eCommerce as millions of consumers choose online space for their shopping. Facebook is making a major push into e-commerce with the launch of&nbsp;<a href="https://www.facebook.com/business/shops" target="_blank" rel="noreferrer noopener">Shops</a>,&nbsp;a way for businesses to set up free storefronts on Facebook and Instagram.&nbsp;



While<a href="https://edition.cnn.com/2020/06/10/business/zara-inditex-online-investment/index.html" target="_blank" rel="noreferrer noopener">&nbsp;Zara-owner Inditex&nbsp;</a>recently announced plans to close up to 1,200 smaller-sized stores, and to invest 3 billion dollars in digital commerce.&nbsp;



“Retailers and tech companies are recognising the significance, need and value to move online in order to accommodate consumer behaviour and sentiment for safer, seamless shopping alternatives.&nbsp; It will be interesting to see the kind of personalised, targeted spin they can put on it based on their collected user data around interests and geolocation,” says Cikes.



How SA retailers can harness this opportunity



The consumer mindset has changed in terms of their relationship to eCommerce.&nbsp; Online has become an accepted, go-to shopping alternative with the digital environment providing consumers with convenience, safety and access to a wide range of shopping options.



And while hygiene and safety concerns have provided the initial impetus in driving consumers online, shoppers have now experienced this environment as a feasible option with its accompanying convenience and benefits. This is entrenching the shift to online shopping, extending its impact to long after the pandemic has passed.



“We’re reaching a tipping point for eCommerce.&nbsp; Standalone bricks and mortar are no longer sufficient as consumers demand more rapid digitisation solutions.&nbsp; The fact that more people than ever are relying on the internet to shop for their everyday needs makes it imperative to have an online shopping model in order to remain competitive and viable.



The eCommerce revolution is here.&nbsp; Those that will survive will be retailers who have a multichannel approach to sales that provides customers with an option for a seamless shopping experience from the comfort of their own homes.&nbsp; This is no longer a luxury. It’s critical,” concludes Cikes.&nbsp;



&#8211; Paul Behrmann, Founder &amp; CEO of Payflex

Excited Woman Shopping Online At Home

Op-Ed: The eCommerce Lifeboat For South Africa’s Retail Industry

Table mountain, the striking mesa above Cape Town, lords over another impressive African monument: the multistory Golden Acre shopping center. Lunchtime crowds pour into the glassy, brightly lit structure, and from within it is impossible not to notice the dominance of South Africa’s second-richest man, Christo Wiese. His bargain-bin clothier, PEP, pulls foot traffic to the basement. Above it, you’ll find his more upscale Ackermans chain. Around the corner is his OK Furniture and his grocery chain, Shoprite, which takes up two floors.
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By and large, they all carry the same message. PEP’s window ads, accented in canary yellow, proclaim it the home of the “Lowest Price in South Africa.” Brightly colored bunting in OK Furniture heralds a similar promise. Shoprite (among its many slogans: “Lower prices, that’s our promise”) will even play moneylender, fronting customers up to R7,500 (roughly $470).
“The business has basically been built on one slogan: Low prices you can trust. Just very, very low everyday prices,” says Wiese (whose name, fittingly, is pronounced VEE-sa, like the credit card). “I suppose we could be described as the Wal-Mart of Africa.” Underscoring the cost-conscious philosophy, the 74-year-old is telling me this at his company headquarters, in an industrial area that abuts a composter and Adult World, which sells what you think it does.
His offices, like his stores, are decidedly spare: drab beige enlivened only by some hotel- quality art (a portrait of an elephant herd hangs outside the door of the conference room he uses as an office). “People have very limited budgets,” continues Wiese, clad in a capitalist’s power uniform – blue suit, blue shirt – the very picture of the lily-white executive that still controls most of South African business. “They have to get extremely good value for their money.” His hunch – that value trumps everything – led him to create the largest retail business in Africa. Publicly traded Shoprite does revenue of $9.9 billion a year, while PEP’s parent company, Steinhoff, brings in $11.8 billion (some of it from selling cellphones and home furnishings). Combined, they net almost $2 billion in annual profits, operate more than 9,000 stores in 30 countries and employ over 200,000 people. No other African retailer comes close to rivaling their breadth and depth, and Wiese controls both.
Those stakes are largely what makes Wiese one of the planet’s richest people, with a $5.8 billion fortune. More than 60% of his wealth is in Shoprite and Steinhoff, while another 30% or so comes from his shares of Brait, an investment vehicle Wiese uses to buy other companies, many of them outside South Africa. His stock in Tradehold, a real estate firm, accounts for much of the remaining 10%.
But if Wiese is to continue his expansion he must move outside of his African comfort zone. The continent isn’t booming the way it once was. Economic growth across Africa has slid from close to 7% in 2007 to about 4% in 2014, the last year for which data are available. In coming years it isn’t likely to much surpass that figure. South Africa, still Wiese’s most important market, is emblematic of the larger trend – stuck at sub-2% growth for the foreseeable future. The slowdown gravely threatens Wiese’s ambitions. He can shut his eyes and picture his empire twice as big as it is today, but for it to grow that large, he must look beyond Africa.
And he’s already started. PEP is expanding rapidly in Europe, while Wiese is snapping up all sorts of companies through Brait, including majority stakes in British discount retailer (sound familiar?) New Look for $1.2 billion last June and Richard Branson’s fitness center chain, Virgin Active, for $1 billion a month later. Put broadly, Wiese is a little Sam Walton, in terms of his focus, and a little Warren Buffett, in terms of amalgamating a portfolio. As a matter of fact, he’s beaten Buffett handily lately. His holding company, Brait, has trounced Berkshire Hathaway in total returns over three years (160% versus 31%), five years (230% to 51%) and ten years (314% to 121%).
<div id="attachment_4832" style="width: 210px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-4832" class="size-medium wp-image-4832" src="/wp-content/uploads/2017/05/0000171388-200x300.jpg" alt="" width="200" height="300" />JOHANNESBURG, SOUTH AFRICA – APRIL 22: Billionaire businessman Dr. Christo Wiese on April 22, 2009 in Johannesburg, South Africa. (Photo by Gallo Images / Foto24 / Sharief Jaffer)</div>
“Christo has been a massive risk taker his whole life,” says Syd Vianello, a retail analyst in Johannesburg, who has observed Wiese over many decades. “Africa is not a place for sissies. You’ve got to have nerves of steel. In Africa they see him as a genius.”
The breathtaking views of Cape Town, where land and sea dramatically converge to produce vistas of green mountains towering above deep blue water, can be quickly forgotten on a nine-hour drive north to the dry, hot savanna city of Upington, an unsightly provincial town alongside the Orange River, close to the Kalahari Desert. Upington does possess one unique site: a statue of a donkey, a rare tribute to the quintessential beast of burden. It is not undeserved. Starting in the 1880s, farmers, employing donkeys to pump water, tamed this rough part of the country with an almost puritanical determination.
Wiese’s father was one of those men. He owned a sheep and cattle farm, as well as a car dealership in town. “People in Upington were hardworking, very neat, very orderly – disciplined,” says Wiese. “People who were not neat always stood out like a sore thumb.” For college, Wiese attended Stellenbosch University, one of South Africa’s better schools, situated in a sleepy area awash in wine and vineyards. He studied law and became head student of his residence hall and an active member of a progressive student organization.
After graduating in 1967, he decided he’d rather return home and join the small retail business owned by his cousin’s husband than become an attorney. The company had around ten discount stores near Upington, which were called PEP. With Wiese on board and helping guide expansion, sales went from 4 million rand in 1970 to 29 million rand (around $100 million today) four years later. Fast growth, but Wiese lost interest after a moment of self-discovery.
“I had worked out for myself that I’m not really” – he trails off, as if about to utter a dirty word – “a number-two man.” There was another concern, too. “I started thinking about getting married,” he says. “And the way I lived in those days, I was away from home 20 days a month. That’s no way to build a marriage. So I thought if I go and practice law, at least I’ll be home much more.”
While working as a barrister in criminal and commercial law in Cape Town, Wiese, restless still, made a futile run for parliament in 1977 on the opposition party ticket, partly inspired by his new father-in-law, a controversial member of parliament expelled from the ruling, pro-apartheid party for dissension. Wiese also grew interested in something that has always attracted the ambitious in South Africa – diamonds. He found a mine nearer his hometown, in Richtersveld. (“The area has a stark beauty, like a moon landscape. Very sparse vegetation, very little rainfall.”) He bought it for about $20 million in today’s currency and began mining and trading diamonds.
<div id="attachment_4830" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-4830" class="size-medium wp-image-4830" src="/wp-content/uploads/2017/05/AV_00022953-300x199.jpg" alt="" width="300" height="199" />JOHANNESBURG, SOUTH AFRICA – JUNE 12: Billionare businessman Christo Wiese on June 12, 2012 in Johannesburg, South Africa. (Photo by Gallo Images / Financial Mail / Hetty Zantman)</div>
Five years after purchasing it, in 1981, he sold it, and looking for his next chapter, he turned to his cousin and PEP, which by then had 450 locations, including a grocery business, Shoprite, it had added a few years earlier. In taking a check (worth roughly $100 million in current terms) for his successful, middling business, the cousin was set for life. Wiese, no longer number two, pictured something much grander. “Maybe I was more ambitious,” he says, quietly, eyebrows arched.
What Wiese envisioned was retail at its rawest, and he understood how attractive it could be. In modest, unadorned storefronts, PEP sold only the simplest kinds of clothes (“underwear, schoolwear, very basic stuff”). The choice between a white shirt and a blue one was often the most complicated one in the store. Shoprite did the same with groceries. All that mattered to Wiese’s target market – poor whites and a black population kept systematically impoverished – was price.
In a perverse twist, apartheid ensured him a gigantic customer base of some 20 million nonwhites, who made up more than 70% of the population. They were incapable of climbing the ladder or earning more money – or shopping elsewhere. And the heavy economic sanctions against South Africa meant little in the way of foreign competition. It was a perfect market: massive and artificially protected.
“Wiese saw the opportunity faster than anybody else,” says retail analyst Vianello. “He targeted the bottom end of the market, and nobody could argue his business had any element of waste. He cut out all the extravagance and gave people what they wanted at the lowest possible price.” The concept proved popular enough for Wiese to begin expanding aggressively, sometimes opening as many as 100 new stores a year. While other retailers concentrated on stores in large markets, he eagerly plunged into rural and poorer areas. He’d rather his customers spend their money in his stores than spend it traveling to them.
Wiese was maniacal about costs, a business necessity in lowmargin retailing and perfectly fitting with his personality – a billionaire who keeps spare change neatly stashed in a tiny bottle inside his Lexus SUV. “Christo is stingy,” says James “Whitey” Basson, Wiese’s right-hand man at Shoprite since day one and an old buddy from Stellenbosch University. “He’ll give me the nicest bottle of champagne as a present, and I’ll open it up, and I’ll see he forgot to take out the message: It’s a bottle from Lord So-and-So. He’s a regifter.”
To guard against corporate expenses, PEP manufactured many of its clothes in 11 factories; one was situated next to the company’s modest offices in Parow Industria. Most important, from almost the start PEP relied on a central distribution system with warehouses to store goods, a total departure from how most South African retailers operated (with many deliveries from many suppliers to each shop). “That was a no-brainer,” Basson says. “Getting one truckload to a store is substantially cheaper than getting 30 trucks to wait outside the store and offload 30 different times.”
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In 1986 Wiese spun off Shoprite and PEP into separate public companies while maintaining control of both. Good timing. Four years later Nelson Mandela was freed after spending almost three decades in prison. Apartheid was ending. South African companies were no longer pariahs, and Wiese began to expand elsewhere in Africa. A year after Mandela ascended to the presidency in 1994, Shoprite opened its first store in central Africa, in Zambia, followed by Mozambique, Swaziland, Botswana, Zimbabwe and Uganda. PEP had a similar trajectory. Their stores’ simple model made them easily exportable.
“Wiese and Basson sat down and took a view that they could conquer Africa, and they went out and conquered Africa,” says Vianello. Shoprite’s size ($2 billion in 1996 sales with about $120 million in cash flow and little debt) allowed it to move more quickly than local rivals. “How long does it take to clear a container in Angola or Nigeria? What bribes do you have to pay to get supplies in? Who on earth would finance them to put up stores? They had to build their own stores themselves. No one else would.” (Wiese insists he has spent not one rand on bribery.)
Other growth came through acquisitions. By the 1990s he had already made six purchases to expand both Shoprite and PEP, pushing PEP’s operations as far as Britain and its sales to more than $2 billion. In 1997 he bought OK Bazaars (and its nearly 300 grocery and furniture stores) from South African Breweries for just one rand. The catch? OK Bazaars was losing around $40 million annually, which was just about how much Shoprite was booking in annual profits. It could be kept on life support for just so long.
“We bet the farm,” says Wiese. He reached for a familiar page from the playbook: “cutting frills, lowering overhead,” including renegotiating several onerous leases. As it turns out, OK Bazaars had good bones and had simply been mismanaged. “Christo is a fantastic corporate deal thinker,” says Basson. “He always makes me think: What would the alternative be if I didn’t make a deal? What happens if the opposition buys the company?”
Wiese didn’t really develop a profile outside of Africa until recently, and to his annoyance, his arrival was trumpeted not by a cunning deal but by something more ignoble. It came after U.K. customs officials detained him at London City Airport in 2009 with two suitcases filled with nearly $1 million in cash. They seized it, suspecting illicit origins. The British and South African press merrily picked up on the incident – apparently suspecting Wiese had been nabbed for money laundering – and were further emboldened by Wiese’s stubbornness in fighting for the funds’ return and his insistence that the amount was “insignificant.” (The Daily Mail’s gleeful headline: “It’s Just Peanuts To Me.”) The government ended up returning the money – interest attached – but the damage was done. He still won’t talk publicly about the incident, and until recently, it was pretty much the extent of his reputation in the West.
That’s now beginning to change, and much of his activity is still in Britain. When his holding company, Brait, first showed an interest in stretching beyond South Africa in 2012, it invested in British supermarket business Iceland Foods and added to its position in November 2015, when it paid about $275 million to increase its position from 19% to 57%. Two more deals came last year: the stakes purchased in discount retailer New Look and gym chain Virgin Active. A second Wiese company, Invicta, has put its capital into industrial companies: unsexy firms with predictable, recurring revenue streams, like Singapore-based Kian Ann Engineering, a distributor of heavy machinery parts. And a third Wiese vehicle, Tradehold, watched the value of its U.K. property portfolio increase by about 50% to roughly $120 million in February 2015 (the latest full-year results available), driven substantially by new investments in the British real estate market, where it owns residential, industrial and office space.
PEP has charged into eastern Europe, too. After its initial move into this part of the continent in 2005 (Poland mostly but also the Czech Republic and Slovakia), PEP has proven its model successful there. Its eastern European stores do about $1,800 per square meter, a 60% increase from 2012 and roughly double what a comparable competitor might do. The region is now 11% of PEP’s $2.9 billion in annual revenue (up from 5% in 2012).
As PEP broadens its store expansion into Britain it will likely run up against the most entrenched competition, including venerable discount retailer Primark. Considering this, Wiese blithely expresses a malapropism: “There’s the old American saying that only three things are certain: death, taxes and competition. You can’t shy away from competition. You’ve just got to go meet them.” And besides, Primark tries to be fashionable, while PEP proudly does not. “We don’t have fashion. You can’t come into our stores and expect a wide selection of colors and pattern,” says Steinhoff CEO Markus Jooste. “Our stuff is for people who have to have it, not want to have it. It offers value to the bottom-end customer and gives them some dignity in what they wear.”
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Last December expansion-minded Steinhoff began trading on the Frankfurt Stock Exchange in addition to its long-standing listing in Johannesburg. But not before Wiese got slapped with a reminder that his international ambitions wouldn’t proceed without a false step. A few days before its Frankfurt debut German tax authorities raided local Steinhoff offices as part of an investigation into its accounting. Steinhoff dismisses the investigation as baseless, but it certainly spooked the company’s investors. The stock dropped about 15% in a month – wiping away almost $600 million from Wiese’s personal fortune.
Having long parried advances from those interested in buying his companies – including a visit by Wal-Mart heir and then chairman Rob Walton several years ago – Wiese sees himself firmly in command of his empire for the foreseeable future. Ahead, there’s one obvious final frontier for Africa’s retail pioneer: America. “We’ve been hesitant to plunge into the retail industry there. What can we teach them?” he says. “But we’re looking at getting involved there – one or two opportunities.
“In a decade I’m hoping you’ll find the business has grown, hopefully at the same pace as the previous decade. That will require a lot of thinking, a lot of commitment and a lot of energy – and I’m hoping that you’ll find me right here still.”

Africa’s Sam Walton

Rich Africans may make their money in Africa, but enjoy spending it in London. After all, London has it all. Nobody is going to be imprisoned because their face no longer fits. The legal system is fair and what’s yours remains yours. Best of all, London has a world-class financial system, which is quite happy to take an African’s wealth and grow it for them. Even with a first-world tax system, London boasts 45 billionaires, making it the world’s fourth richest city.
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<h4>Education</h4>
For successful Africans, nothing is more important than educating their children for future success. Britain is rather good at this, and school is where you make friends and contacts for life. It defines your social status. A recent Tatler article on wealthy Nigerians highlighted Florence Otedola, the 20-year-old King’s School-educated daughter of Femi Otedola, one of Nigeria’s richest men. Boarding fees for King’s in 2014-15 are $55,700, and according to Tatler, Nigerians spend $500 million every year at British universities and schools such as Benenden, Wycombe Abbey, Cheltenham Ladies’ College, Eton, Harrow and Bradfield.
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<h4>Concierge service</h4>
Rich people employ a concierge business to open doors in London, and rich Africans are no exception. Veronica Voronina is CEO and Founder of her own concierge business, The Anonymous, which has a number of wealthy African clients. The idea is to allow the superrich to plug into a network of excellence.
“Our database is our best asset. We source the best of everything – doctors, lawyers, property agents, party planners, nannies, restaurants, hotels, even the best diamonds,”
says Vorinina.
It’s all about price and quality.
“Rich people didn’t get rich by wasting money.”
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<h4>Houses</h4>
Many wealthy Africans have business interests in London. So, even if they are only there for a few weeks a year, Africans like to buy. The preferred areas are Knightsbridge, Belgravia, St John’s Wood, and Kensington and Chelsea. The most controversial development is One Hyde Park in Knightsbridge, described as the most expensive residential development on earth. One apartment reputedly sold for $230 million. Several billionaire Africans have bought there, but few live there; it is an investment not a home. Upper-class Londoners, priced out of their natural habitat by international interlopers, are said to be increasingly unhappy.
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<h4>Hotels</h4>
Africans fly around the world in pursuit of business deals and the hotel they choose to stay in often defines their social status. The most prestigious hotels to namedrop are the grand old London hotels, The Lanesborough, The Dorchester and Claridges. The Royal Suite at Claridges will set you back around $82,000 per week. And of course the Mandarin Oriental in Knightsbridge is the quintessential business hotel chain. Younger entrepreneurs may prefer boutique hotels like Andre Balazs’ Chiltern Firehouse hotel. All reek of exclusivity.
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Shopping
Wealthy Africans love to shop. Their favorite stores in London are Harvey Nichols, Harrods and Selfridges. It’s a well-oiled world of shopping by appointment, private openings, personal shoppers and trips to private shopping departments, as well as limousines and drivers to carry the shopping home. The shopping company Premier Tax Free reports that Nigerians account for 46.3% of total African sales in London and the fastest-growing region for international sales in Britain this year has been Africa, whose spend has grown by 45% year on year.
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<h4>Experiences</h4>
The Beatles sang money can’t buy you love. But according to concierge company, The Anonymous, money can buy pretty much everything else. One client, convinced the world was coming to an end, decided to splash out. Alongside gas masks and copious quantities of food, they wanted the best, no expense spared, holiday ever. A private jet was hired for a three-week trip around the United States. Helicopters flew the family over the Grand Canyon and New York. The client splashed $25,000 on the illusionist Criss Angel and then went to Universal Studios in Florida on a VIP pass. Hopefully the holiday offset any disappointment that the world still exists.
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<h4>Private jets</h4>
For mere mortals, travel is conducted by commercial plane and train. For the uber-wealthy transport is done by private jet. And if you don’t own one, you charter one. Charter companies like Little Blue will fly you to Paris for the weekend for around $20,000. Nigerians don’t just use private jets to carry themselves; they take their lifestyle with them.
“If someone wants basic food &#8211; milk, bread, cheese, yogurt – I’ll go somewhere, like Whole Foods, and pick up the employer on the way to Farnborough (a small airport on the outskirts of London), load it on the plane and send it off,” says Ansema Fagapona, who works with rich families.
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<h4>Superyachts</h4>
Yachting is as much about the exclusive lifestyle as it is about owning a boat. With it comes access to a world beyond the reach of mere mortals. For those who can afford it, glittering European destinations like Monaco, Cannes and the azure seas of Sardinia beckon, and few luxury experiences are better than being on a yacht.
To order a new superyacht at one shipyard, tycoons need to put their names on a five-year waiting list. A weekly charter of the stunning 65-metre superyacht, Imagine, at $710,000 per week may be the preferred option.
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<h4>Celebrations</h4>
What is better than going to an Akon concert with friends to celebrate your 16th birthday? How about a private Akon gig? Did I mention that the 15 friends were all flown to a private island near Dubai, transported in limousines and given Michelin-star catering? Wealthy Africans certainly know how to party. And if you would like to treat your wife on your wedding anniversary, why not hire the renowned Cipriani’s Italian restaurant in Mayfair for a night. You and your beloved can be the only diners on the night, with Beverly Knight on vocals  to add a special touch of romance. Ahhh.
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<h4>Polo</h4>
Polo is famously the sport of kings and was introduced to Lagos in the 1930s through the Lagos Polo Club. Today, in Britain, you will find oil and gas supremo Kola Karim playing polo with Prince William and Prince Harry at Andrew Lloyd-Webber’s private estate, and at Cowdray Park, the best polo ground in the country. The Veuve Clicquot Gold Cup is the most prestigious competition and Nigeria’s Prince Albert Esiri has competed several times. A team of four players, each with a dozen or more top polo horses, would need millions of dollars to play a sing

How Africans Splash Their Cash

Daniel Guasco and Wayne Gosling left South Africa for the United Kingdom, but only met when they both returned to South Africa to do an MBA at the University of Cape Town. These two entrepreneurs launched South African group buying website Twangoo, which was purchased 125 days after it opened, by the global leader in the industry, Groupon.
The name Twangoo comes from a Chinese term Tuangou, which means ‘team buying’. The story goes that for years in China, several people would approach a vendor as a group to get discounts. This strategy has been recreated online and is a booming business, according to tech website webgeekly.com: “Websites like Groupon are making a killing by taking small percentages off each offer purchased.” Groupon is a portmanteau derived from ‘group’ and ‘coupon’.
Guasco and Gosling first got the idea after attending a launch at the Silicon Cape Initiative, in Cape Town. The event is based on Silicon Valley in California, where many global IT companies were born.
“At the launch, I saw a number of very successful online tech entrepreneurs and a lot of talk about what’s happening online. And I couldn’t write a word of code [and was] not tech-oriented in any way. Both our backgrounds are entrepreneurial [… ] In 2009, Groupon was just starting to come onto the radar and really becoming big in the States. And then on January 3, the evaluation of Groupon came out with a billion US dollars […] We then went on to form an alliance with some other MBA guys and formed a partnership with them to start up what was then known as Twangoo here in SA,” says Gosling.
With R10,000 ($1,130) between them, they launched Twangoo in 2010 and within 125 days they were bought out by Groupon for an undisclosed amount.
“The cool thing about Twangoo [and] Dan and I is that we’ve never met the guys that bought the website. We never met the guy that helped finance us. We only met afterwards, once we’d sold the business […] The developer is actually Russian. It shows it can be done if you put your mind to it,” says Gosling.
Groupon was launched in 2008 by Andrew Mason, a final-year university student, who had caught the eye of entrepreneur Eric Lefkofsky. He recognized Mason’s potential, after the student created a social initiatives platform, which evolved into Groupon.
“Ironically, when we started Groupon, we were thinking of it as this sort of discount site that will be the business model, the tail that wags the dog. But we hear from so many of our users how great it’s been for their lives, that it’s helping them get out of the house or the city and really enjoy their lives […],” Mason had said in an interview with ChicagoBusiness.com.
However, despite being CEO for four and a half years, Mason was fired in February, after the company had a number of disappointing quarterly earnings. The New York Times reported that Groupon was valued at $16.5 billion, when it went public in late 2011. By February, its value had dropped to $2.97 billion. Many shared the sentiment that Mason’s dismissal was long overdue.
On a global scale, however, Groupon is expanding—it has websites in 49 countries, but only one in Africa for the time being.
“It’s part of the bigger Groupon picture […] I think South Africa is still such a huge opportunity. I think the other challenge, as well, is mobile. We’ve launched quite a big initiative in South Africa around mobile,” says Guasco.
It hasn’t been a smooth ride starting an online-based business in a country such as South Africa, which, according to the World Bank, has 6.2 million internet users—12% of the population.
“Either the internet connection doesn’t work at home; it’s obviously very costly so it’s limited us to some degree, even though it’s taken off really well in this country. It’s still a challenge given that you need a smartphone type-enabled phone to really allow you to benefit to how Groupon is currently positioned,” says Gosling.
If they plan to expand across the continent, they need to take note of the other top nine internet users in Africa in 2012: Algeria, Egypt, Kenya, Morocco, Nigeria, Sudan, Tanzania, Tunisia and Uganda
Groupon has a lot of competition in South Africa alone, which shows that the middle class is growing and spending.
<h4>Other Top Group Buying Sites In South Africa</h4>
• www.dealclick.co.za 
• www.ubuntudeal.co.za 
• www.studentspecials.net 
• www.salewine.co.za 
• www.wicount.co.za 
• www.citymob.co.za 
• www.24hoursonly.co.za 
• www.onedayonly.co.za 
• www.wekidunot.co.za 
• www.sacoupons.co.za 
• www.daddysdeals.co.za 
• www.cityslicker.co.za 
• www.collectivecow.com 
• www.ucit.co.za 
• www.schweetdeal.co.za 
• www.youdeal.co.za 
• www.vuvuplaza.co.za

Mob Shopping Makes  The Wallet Thicker

Jonathan Liebmann is 29, owns 25 buildings and has lived on five of the seven continents. Now, he has made his nest in a small corner on the east side of the most vibrant city in Africa—Johannesburg.
Johannesburg city was established in 1886, as a farm where gold miners from all over the globe came to make their money. That is where it got the name Egoli—meaning place of gold. In decades to follow, it became the shopping mecca of Gauteng’s elite. Today, all the big banks and businesses have relocated to the northern suburbs and the new tenants are mostly African immigrants looking for a place to make a living; the streets are busy, there are shops at every turn and a multitude of languages in the CBD.
There is a sign that hangs between two buildings on his street, it reads Maboneng— meaning place of lights in Sesotho. It’s a fitting description for a beacon in the middle of a city plagued by crime, dilapidated buildings and grim life. Just down the road, there’s a men’s hostel where even the police are afraid to go.
Liebmann is rejuvenating the east’s run down image one building at a time. The corner coffee shops, restaurants, independent movie house and boutique hotel are abuzz as you walk the streets of Maboneng Precinct.
He has just bought his 25th building, which he will convert into apartments. We stand on the roof of the new building looking down onto another flat roof. Two recycling vendors are having lunch on a two plate stove, they are surrounded by recycled bags containing plastic bottles. This is one of the many facets of Johannesburg hustle.
You could say the streets behind Liebmann are a playground for his entrepreneurial mind.
<div id="attachment_1283" style="width: 210px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1283" class="size-medium wp-image-1283" src="/wp-content/uploads/2017/04/380-380_1-200x300.jpg" alt="" width="200" height="300" />Property developer Jonathan Liebmann, Johannesburg; 19 July 2012 &#8211; Photo by Brett Eloff.</div>
Liebmann’s entrepreneurial spirit is as young as many of the buildings are old. He made his first profit at 18, at a time when most people hadn’t even thought about buying their first car, let alone buy one. He had bought, renovated and resold an apartment and at 21 he turned an old factory into an office for rent.
“When I was 18, I realized I wanted to be involved in property. I went to university but while I was [there] I started investing in property on a small level. I bought my first apartment that I renovated, with the bank’s money, and then I just worked my way up from there… I enjoy being the pioneer and taking the first steps, so for me that risk was an attraction. And at the same time I was completing my accounting degree so I was working and studying as well,” says Liebmann.
Liebmann bought his own apartment at 20, after a year of nomadic life across the world, traveling and doing odd jobs from construction to telesales consulting. Traveling is something he learnt from a young age, as a child Liebmann moved almost ten times with his divorced single mother and older brother.
“I started thinking about how I could do my own large developments of [loft culture] and started looking for old factory spaces that would have the right type of aesthetic to do that and that’s when I found my first buildings in Maboneng.”
“I traveled all around the world after school and that exposed me to a lot to urban culture,” he says.
And since his return to Johannesburg—the city of his birth—he wants to inject new life into the city; artists, business and residents are following him.
While on his travels, Liebmann went from being a construction worker to a telesales person, skills he would later use in his chosen career.
You can tell from the moment you meet Liebmann that he’s driven. He’s sharp and has an air of confidence that could be interpreted as arrogance when he speaks about his work. He’s got that ‘I know what I want and I know how I’m going to get it’ tone as he tucks his brown hair beneath his ears throughout the interview.
Earlier this year, Liebmann was invited to the World Economic Forum in Addis Ababa, Ethiopia.
“I was selected as a global shaper along with 30 other young people from Africa. I learnt about the common objectives of African countries to collaborate with one another in an attempt for Africa to become the next frontier,” says Liebmann.
While we sit at a corner coffee shop, a number of people greet him as they pass by. Liebmann and his vision are growing in stature in this area of decaying factories and empty buildings, which is a living manifestation of the saying “one man’s trash is another man’s treasure”.
Not only has it managed to attract people and money back into the city but it has also put his family back together.
His mother owns a coffee shop, his father owns a gallery and his step-brother works here too.
It’s a risky investment.
One minute one area could be the trendy spot where the masses flock and in a number of years may degenerate and experience flight.
His architect, Enrico Daffonchio says property goes in cycles in every city of the globe.
“There is a spectrum of different perspective [on its potential], however the spectrum of opinion from the cynics is reducing… Cities get renewed throughout history, it’s not a new thing. There are tax incentives to refurbish those areas. [So] there’s tax incentives and governments copy each other ,” says Daffonchio.
How did Liebmann get people to Maboneng and does he think they will stay?
“I think initially the challenge was changing people’s perceptions of the city. Yes, it’s a continuing struggle but it’s far easier as we grow block by block… I think Johannesburg is at the beginning of its curve of regeneration. There’s a long way to go [but] it’s certainly showing promise… You’ve got to build spaces that attract people back…”
Property economist and University of Capet Town lecturer, François Viruly says it’s not the government’s duty to upkeep the city.
“The role of government is primarily to ensure that an environment is created that encourages private sector investment in the CBD&#8230; I don’t think that there is anything wrong with the private sector owning buildings in the CBD. Urban decay is a problem that local governments have faced across the world. In South Africa, the decentralization of commercial space has invariably left CBDs with high vacancy rates.”
These are vacancy rates which Liebmann is grabbing with both hands—a dream he is creating one building at a time.

Tag: Shopping

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