Rating South Africa in the Second-Hand Savvy Stakes
South Africans are often accused of slavishly imitating international trends but, in fact, we adopt and adapt them with great ingenuity and individuality, says Richard Mukheibir, CEO of Cash Converters. Having just returned from a fact-finding tour of related businesses in Australia, Singapore and the United Kingdom, he is more admiring than ever of the way South Africans have had to be ingenious problem-solvers for all kinds of historic and economic reasons – especially in this period of increasing costs for petrol, transport, electricity and other basics.
“In all three of the countries I visited, jewellery formed about 25 per cent of the Cash Converters’ turnover contrasted to less than 10 per cent here. That is a learning we shall definitely be working on in the months ahead in South Africa,” says Mukheibir.
Most of these consumers can afford to buy new but choose to buy second-hand for ethical reasons such as reducing waste and contributing to environmental health. They can afford to donate to the large range of charity shops found overseas rather than needing to raise cash on household and other items that they have tired of. They also enjoy browsing these shops for unusual items that help them individualise their homes or that offer opportunities for them to enjoy repurposing and adding their own stamp.
“We have developed a heritage that is creative in approaching all kinds of problems and challenges and this approach is played out right across the economy,” he says.
Mukheibir classifies all the countries he visited as first-world economies, differing from South Africa in both the reasons for buying and selling and the mix of goods sold. “The millennials are growing up and now in a life phase anywhere between their first job and their first child, making the recycle, reuse, repurpose ethic an important driver, though stronger in the more affluent first world,” he says.
They are more likely to sell on higher-value – in some cases, new or nearly new – second-hand goods. For this reason, the primary goods dealt with by Cash Converters Australia are TVs, laptops and computer goods, cameras, sporting goods and jewellery. They do not deal in furniture and small items of bric-a-brac, such as cups, saucers and plates.
Cash Converters stores in South Africa cater for a much broader customer demographic and so carries a much broader product range than those in the countries Mukheibir visited. The group’s stores here have helped many a South African customer furnish an RDP house or a first apartment with affordable, good-quality second-hand pieces, he says. Mukheibir sees this as part of the traditional brand-conscious image of South African consumers.
Change always needs to be carefully calibrated in the South African retail market because it is unusually segmented and customers do not hesitate to speak out about their own needs and preferences, he believes. In a market of more than 16 000 second-hand dealers registered under the Second Hand Goods Act, Cash Converters stands out for pioneering second-hand trading as part of their retail mainstream through the professional standards enforced within the franchise.
“We have built a loyal customer base who are utterly second-hand savvy,” he says. “They know that they can get much more brand for much less money with us. They are focused on a brand or brands and we find that recognised brands always sell faster and for higher prices than a no-name equivalent.
“Our customers believe it makes commercial sense to buy these selected second-hand brands with us rather than no-name ones new. They also appreciate the fact that they can buy and sell in a polished, corporate retail setting, with full retail support and a six-month guarantee. That’s why so many of our first-time customers are converts to savvy second-hand buying and become our regulars.”
About Cash Converters
Cash Converters Southern Africa was co-founded in 1994 when Richard Mukheibir (Chief Executive Officer) and Peter Forshaw (Chief Financial Officer) bought the licence to establish a master franchise of the Australian brand, the world leader in trading and marketing second-hand goods and now the world’s largest cash and asset converter. Cash Converters Southern Africa purchases merchandise from customers, enabling them to have instant access to cash.
Since 2007, it has also offered short term loans against a customer’s valuables or against their salary. Cash Converters Southern Africa is built on a solid foundation of franchisee owner operators, guided by core values of passion, professionalism, integrity, respect and collaboration. It has already empowered nearly 100 franchisees to run their own businesses and create their own wealth. Each franchise store, in turn, provides job opportunities for an average of 12 employees, each supporting about five other people. This network of businesses is supported by robust processes and systems and ongoing training programmes for franchisees and staff.