Cross-border Retail Tourism: quick guide

What we do

ComMark, the City of Johannesburg and its retailers have identified opportunities to enhance cross-border shopping tourism by addressing a number of challenges around this rapidly growing, R6-million sub-sector – found mainly in the regulatory environments, physical safety of traders and goods, and logistical problems around accommodation, storage and transport. These challenges hinder the City’s objective to become ‘Jobai’ – the Dubai of Southern Africa – by attracting increasing numbers of cross-border shoppers to the city.

Why this intervention

Cross-border retail trade is characterised by:

1. Income-generating opportunities and growth potential for the single-person, owner/operator to grow into an SME with fixed assets (storage) and stock value (upscaling).
2.  High percentages of female traders, which ensure more direct pro-poor household benefits.
3. Excellent opportunities for market linkages between wholesale & larger retail outlets and small, rural and peri-urban retail outlets in neighbouring countries.
4. Scope for improved use of Johannesburg’s inner-city accommodation and transport facilities in terms of volume and frequency.

These opportunities conform to ComMark’s objectives around the Making Markets Work for the Poor approach, and broaden the scope of our intervention away from destinations associated with ‘classic tourism’, thereby strengthening the understanding and awareness of tourism’s economic importance and impact for the country as a whole.

What we achieve

ComMark conducted a comprehensive survey of retail tourists, traders and retail outlets which formed the basis for concrete recommendations and the need for the establishment of a stakeholder forum. The results from the survey showed a sector that contributes a substantial amount to the local economy of Johannesburg, via spending on goods and services (such as accommodation and transport). The survey paints a picture very different to common popular perceptions of foreigners being a drain on the state. The presence of these shoppers and traders is undoubtedly a net gain for the South African economy, and stimulates trade and enterprise development throughout Southern Africa.

ComMark’s intervention has recognised that this sector is faced with a number of constraints to expansion. The research shows that these problems include “the safety and security of the shoppers while they are here due to a lack of appropriately priced accommodation and storage facilities; poor transport to and from the city but particularly within the city; problems encountered with customs, visas, VAT and excise; a lack of reliable information for the shoppers; and, sadly, instances of xenophobia”.

The study has confirmed that cross-border shoppers and traders comprise a category that is diverse and varied, in terms of the kinds of activities in which they engage, the levels of income and expenditure, and the status of the people as visitors. Clearly a section of the group comprises people who are in effect ‘immigrants’ who will spend the rest of their working lives as locally based cross-border traders. ComMark can safely say that the activities of cross-border traders and shoppers such as those interviewed in this survey are not only (or even primarily) a ‘tourist’ phenomenon. The sector needs to be reassessed by relevant policy-makers and authorities as a special sector of economic activity. Regulations will have to be adapted with this in mind if the sector is to be effectively supported to the benefit of the local economy.

Joined thinking is required to reduce these barriers to the expansion of this sector. To this extent, ComMark supported the establishment of a Johannesburg Cross Border Shopping Forum which consists of representatives of all stakeholders in both the regulatory and the operational environment.

How is this sustainable

The creation of the Johannesburg Cross Border Shopping Forum as a statutory membership body has been well received and has created awareness and understanding of the issues that currently impede the growth of the sector and its contribution to the national and regional economy. The impetus is on the newly elected leadership of the forum to initiate appropriate interventions and dialogue towards tapping the “bags full of possibilities” of cross-border trade and shopping.

Who we work with

The finalised interventions were conducted in close collaboration with the City of Johannesburg and the various retail outlets, accommodation and (public) transport representatives in down-town Johannesburg.