The local Fast Moving Consumer Goods (FMCG) industry has reached a point of saturation, leaving little space for expansion and limited prospects of profitability from new store openings. For many industry players, a viable alternative would be to grow market share internally, by harnessing growth of sales, improving product range and lowering prices.
It emerged on Thursday last week that this is the route the Sefalana Holdings Group Limited has decided to take, at the launch of the company’s revamped brand identity. Sefalana, which boasts of various operations in trading, manufacturing, motors and property, last week revealed that all its divisions will adopt the new brand identity.
Explaining the motivation behind the change, Finance Director Mohamed Osman said the fragmented identities of the various divisions made it difficult for the Group to leverage on the strength of its strong and successful brand that was built over the last 40 years of its existence. Osman added that the accelerated growth of Sefalana’s operations over the years led to its various divisions having isolated and polarised identities. The Group has backtracked from its earlier commitment to opening four new stores every year after realizing that it needs to take a measured approach to expansion in a market that has reached maximized point. Sefalana presently boasts of a total of 52 stores countrywide.
“We will open a new store just because we can, it must be profitable to do so,” said Osman.
He further said the availability of suitable sites for new store openings is an important and viable consideration, of which the local market does not demonstrate. Growth will therefore come from increasing the Group’s market share, particularly within its FMCG division. The fresh new look is expected to not only remind but also make customers look at the brand with a sense of renewed energy and excitement.
Sefalana intends to position itself as a better alternative against other retail players in the industry, with emphasis in competitive pricing, given that the market it targets is a price sensitive market. The Group will also extend the range of its in-house “A Star” brand to increase overall product range in stores. An example of a new product that Sefalana will introduce in the next month or two is the fizzy drinks. The changes are in essence anticipated to improve customer satisfaction through better delivery service.
The Group also introduced its new catchphrase, “your basket of opportunities,” which is associated with the re-invented identity and speaks to the benefits and value that will be added to all the people who interact with Sefalana. The rebranding is estimated to have cost P5-6 million, which according to Osman is approximately equivalent to the cost of opening a new store. The roll out of the new brand into the different divisions is expected to be completed within nine months. The new look will however not be taken up by the 12 stores that Sefalana acquired in Namibia as they will retain the name under which they were bought.