High Local Prices Creating Cross-Border Trade Opportunities for SMEs
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High Local Prices Creating Cross-Border Trade Opportunities for SMEs

ExportPortal 9 Oct, 2019
High Local Prices Creating Cross-Border Trade Opportunities for SMEs

Zimbabwean retail companies are charging high prices, and that has created a growing industry of small entrepreneurs who can offer better rates for foreign goods. Read More!

Zimbabwean retail companies are charging high prices, and that has created a growing industry of small entrepreneurs who can offer better rates for foreign goods.

Like most economies, Zimbabwe's retail sector is dominated by big players. These large players had the advantage of economies of scale and could:

  • Access cheap financing
  • Buy goods in bulk and therefore at lower prices.
  • Create physical distribution channels to reach new customers

These large retailers rendered small businesses inefficient, expensive, and inaccessible to the general public. As Zimbabwe's economy has faltered, the advantages that large retailers had is disappearing. They have been hindered by:

  • No access to foreign currency to import raw materials or goods
  • A volatile local currency continues to fall. Increasing prices daily is unpopular with the general public and the strict government
  • General business uncertainty that has increased risk which has led to the withering of financing options and international business relationships

Smaller players have been able to take advantage of the situation by:

  • Accessing foreign currency on the black market. It's easier for an individual to get away with buying foreign currency from the black market than it is for a large company
  • Focusing on serving smaller customer groups who are willing and able to pay for goods in foreign currency
  • Keeping expenses extremely low to keep prices low

These small players are usually individuals. They can supply anything that any person or business needs from abroad. They can supply motor spares, machinery spares, clothing, groceries, electronics, etc. The most popular destination for cross border traders is South Africa. They also use Botswana, Zambia, and can even go as far as Dubai or China.

The profile of these small players usually takes the form of:

  • An individual who uses a twin cab vehicle towing a trailer. In the southern region of Zimbabwe, they are known as "umalayitsha." They usually ferry household goods between South Africa and Zimbabwe. They are used by individuals to import groceries, or they could be sent by the diaspora to supply relatives back home.
  • Some individuals supply inputs to companies usually by order. They are known as "runners." They can source their products from South Africa, but they can go as far as Dubai or China for goods.
  • There is a new crop of businesses that are using the internet to provide groceries to Zimbabweans. They usually focus on the diaspora who want to send groceries home, but they can cater for Zimbabweans who wish to import their groceries.

As Zimbabwe's economy deteriorates, it will create more business opportunities for those willing to cross the border. Export Portal makes it easy for these SMEs to start taking advantage of these trade opportunities: our platform has everything needed to complete an international trade transaction. Register on our platform today to gain access to a new global market!

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