Choppies, the home-made retail giant, is not worried that Wal-Mart, the American operator of discount stores, is coming to Africa and Botswana in full force as it is on the verge of buying owners of Game Stores.
Boosting 49 stores across the country and targeting a different market to that of its peers, Choppies, which originated in Lobatse, said it is ready to take competition head on.
Ram Ottapath, Chief Executive Officer of the company, which is setting its eyes on the Botswana Stock Exchange (BSE), said Wal-Mart entry is too much hyped up.
“You have to deal with competition. We can beat Wal-Mart,” Ottapath said.
Wal-Mart is in the process of acquiring South Africa’s Massmart, which owns Game stores across Africa, including Botswana. It also owns Builders Warehouse, a building materials company that recently entered the local market.
Game is a major discount retailer of general merchandise and non-perishable groceries for home, leisure and business use.
After buying Massmart, Wal-Mart may ring changes that may include offering more products that Game does not offer and these may include Wal-Mart Supercentre, which offers perishable goods that include poultry and meat products and compete directly with local chains.
Wal-Mart is made famous by its expression that when you enter its doors, by the time you get out, you have everything you need from a spade to seafood products.
However, Choppies is not worried as it currently controls 30 percent of the Fast Moving Consumer Goods (FMCG) and competes mainly with South African retailers that have controlled the market for a long time before the entry of Choppies.
“We are not worried by Wal-Mart. In fact, we already are competing with them because they own some shops here,” added Ottapath. “For Choppies, there is nothing new.”
Ottapath said their target market remains the lower to middle income customers although it, in the recent past, added Choppies Hyper, where wealthy families can be seen driving trolleys around.
Wal-Mart looks set to come to Africa despite concerns over its procurement policies. South African unions are worried the giant U.S multinational will create linkages with external business, especially the Chinese, therefore sidelining local suppliers.
South Africa Competition Tribunal gave the merger the green light with conditions including an undertaking that under the deal, a R100 million (about P96.6 million) supplier development fund will be set up.
Locally, Choppies has made an undertaking to support local producers as 75 percent of the local horticultural produce is sold and distributed through its network, which is said to be the biggest after BotswanaPost.
Although some customers have raised doubts on the quality of local produce, Choppies is of the view there is need to support local farmers so that they could grow.
“On average, we are happy with the production from Batswana producers,” said Ottapath.
Choppies buys its horticultural stock from Botswana Development Corporation (BDC) underpinned Talana Farms and individual farmers.
Choppies has nine stores in the north western part of South Africa, which has similar cultural traits as Botswana.
Ottapath said the stores have been performing well since they started operations there. “In the North West, we are doing reasonably well as our stores are turning in profit.”