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Retailers chase profits in Africa with Zambia mall opening

posted 29 Dec 2010, 08:10 by Mpelembe Admin   [ updated 29 Dec 2010, 08:14 ]

A new mall in Lusaka announces the arrival of large-scale foreign investment in the country's retail sector.

LUSAKA, ZAMBIA REUTERS - 
Zambia has long been a destination for international capital chasing returns from commodities like copper.


The opening of the first foreign-owned shopping mall, with an investment injection of some 55 million US dollars marks the start of new flows of capital as international retailers chase returns in the fast-growing African retail market.

Manda Hill Shopping Centre, located in the capital Lusaka , is expected to generate about 1,000 jobs. It will

have an expanded tenant mix and the coming of South African stores like Foschini, Markhams, Fashion Express, Sterns and Sportscene, Truworths, Shoprite, Game stores, Uzzi and Identity among others, will offer Zambians a variety of products that until recently could only be purchased on trips out of the country.

Other South African brands include Mr Price Combo, OK Furniture, MTN and Pep Stores. Botswana company, Homecorp Super Store has a free-standing branch at the mall.

And while some Zambians have expressed concern at the arrival of South African stores and the impact they might have on Zambian retailers, centre manager, Charity Banage, said the investment was likely to benefit Zambians.

"We had to build on an existing shopping mall which has even been more expensive so we put in more than 55 million dollars, we have created more employment, we have used, we promoted Zambian industries by buying materials from them, so really this has been a great investment," Banage told Reuters Television.

Retailers can be happy the mall opened well in time for Christmas, with an official opening expected for January.

Zambians shopping at the mall said they believed that the arrival of the chain stores meant that middle class Zambians would no longer have to travel to South Africa , Hong Kong and Dubai, to acquire certain products.

"It makes the world come closer to Zambia . Gone are the days when you actually had to be envious of those who have the opportunity to travel to South Africa to get some of the goodies that we have here at the new shopping complex," said one mall patron, Boniface Chembe.

With an economy that has grown at roughly six percent a year for the past five years, Zambia's middle class has experienced strong growth and increased buying power. There are now a number of retail outlets planned in the country of some 13 million, with investment levels of greater than ten million dollars.

Back in Manda Hill, some patrons feel that whether or not they have money to spend, the mall marks a level of development for the whole country.

"It's the first in Zambia. It's a big step ya, in development and it's gonna bring people here and its really cool because its shops and girls love shopping. New technology, things we have never seen ya, ya And it just shows that Zambia can do it as well, like, people come here and they feel 'okay, where are we gona go now?' And this is something that's everywhere now, like in South Africa these malls are everywhere. Our country is developing," said three friends out exploring the mall together.

While many of the franchises at the mall are owned and run by Zambians, there have been concerns that small-scale retailers across the city could suffer. Banage says the introduction of new shops is good for competition and that local retailers have taken the challenge positively.

"Actually, you know, I think that the Zambian retailers, um, actually have taken this challenge positively and they have said, 'Look, this is good for us, lets, we're trying to match up to that level' and I can see the excitement. Noone, I've not heard any retailer who is complaining and saying, 'How can you bring this?' Its really about, "You're coming with this, you are complimenting us Zambians lets move forward'," Banage said.

Zambia 's parliament recently extended the country's business hours from 8 am to 10 pm. Previously, trading took place from 8 am to 5 pm.

With retailers in more developed markets facing stagnant buying trendss following the world financial crisis, many are increasing their international footprint to include both emerging and frontier markets and the world's largest retail company, Wallmart recently announced a major investment in Africa by targeting South Africa's Massmart.

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