The rural rand is growing in power and big retailers and mall developers have recognised this growth.
Developers were on a drive to expand in rural and peri-urban areas, said Eastern Cape mall developer the Billion Group in a statement.
Mthatha and surrounds were proof of this, said Lolo Sabisa, the group’s general manager of its Mthatha mall, BT Ngebs City.
He said their experience was that the urban retail space was reaching saturation point, and that innovative South African developers were benefiting from rural and peri-urban markets as the new areas for growth.
Sabisa said the spending power and brand consciousness of peri-urban consumers and those in smaller urban settlements was often underestimated.
“The population of Mthatha is becoming more upwardly mobile and retail sales are correspondingly increasing. Even lower-income consumers are willing to spend a little more on major brands if they believe they are getting quality and value for money in return for their hard-earned cash,” said Sabisa.
He said many major retailers had grasped this fact and were aggressively looking for expansion opportunities outside the big cities.
Mega malls in smaller centres offered them this opportunity.
Sabisa said the Billion Group was among the first to understand these shifts in spending patterns and was one of the earliest and most successful adopters of the new approach to malls in the rural and semi-rural areas.
Their 60000m² regional mall, which opened in Mthatha two years ago, serves a 99% Xhosa-speaking market of 478000 households in the former Transkei hub and surrounding rural areas.
“The mall has carved out a niche for itself by bringing the kind of high-end national and international brands that are traditionally reserved for big cities like Johannesburg and Cape Town,” he said.
“The Mthatha market has rewarded investor confidence and BT Ngebs City has seen consistent growth since opening its doors in 2015, with a 17.9% year-on-year increase in total turnover.
“Despite increasingly difficult national economic conditions, spend per head had also increased by 5% year-on-year.”
Sabisa said BT Ngebs City offered Mthatha 105 big-brand clothing, grocery, homeware and other retail stores, plus 10 restaurants and food outlets – including the high-end Melissa’s Food Shop.
Clothing brands like Timberland, Spitz and Forever New had been well received by shoppers and were trading strongly.
“The launch of Motion Fitness Health Club earlier this year has rounded out our complete lifestyle offering.
“Our aim is to make BT Ngebs City the destination of choice in Mthatha, and the 12.2% year-on-year growth in footfall indicates that we are on our way to achieving this,” he said.
He said the Billion Group had invested in the growth of Mthatha by spending R1.4-billion on the mega mall’s construction and a further R60-million on surrounding roads and infrastructure.
“The mall is the catalyst for a business and lifestyle precinct along the N2, which enters its second phase later this year with the opening of a four-star hotel adjoining the mall,” he said.
Similarly, the Billion Group’s R2-billion Baywest Mall in Port Elizabeth – opened a few months before BT Ngebs in 2015 – had also attracted a greater peri-urban market, according to Baywest management. — ziphon@dispatch.co.za
Rural areas attract top retailers
Developers were on a drive to expand in rural and peri-urban areas, said Eastern Cape mall developer the Billion Group in a statement.
Mthatha and surrounds were proof of this, said Lolo Sabisa, the group’s general manager of its Mthatha mall, BT Ngebs City.
He said their experience was that the urban retail space was reaching saturation point, and that innovative South African developers were benefiting from rural and peri-urban markets as the new areas for growth.
Sabisa said the spending power and brand consciousness of peri-urban consumers and those in smaller urban settlements was often underestimated.
“The population of Mthatha is becoming more upwardly mobile and retail sales are correspondingly increasing. Even lower-income consumers are willing to spend a little more on major brands if they believe they are getting quality and value for money in return for their hard-earned cash,” said Sabisa.
He said many major retailers had grasped this fact and were aggressively looking for expansion opportunities outside the big cities.
Mega malls in smaller centres offered them this opportunity.
Sabisa said the Billion Group was among the first to understand these shifts in spending patterns and was one of the earliest and most successful adopters of the new approach to malls in the rural and semi-rural areas.
Their 60000m² regional mall, which opened in Mthatha two years ago, serves a 99% Xhosa-speaking market of 478000 households in the former Transkei hub and surrounding rural areas.
“The mall has carved out a niche for itself by bringing the kind of high-end national and international brands that are traditionally reserved for big cities like Johannesburg and Cape Town,” he said.
“The Mthatha market has rewarded investor confidence and BT Ngebs City has seen consistent growth since opening its doors in 2015, with a 17.9% year-on-year increase in total turnover.
“Despite increasingly difficult national economic conditions, spend per head had also increased by 5% year-on-year.”
Sabisa said BT Ngebs City offered Mthatha 105 big-brand clothing, grocery, homeware and other retail stores, plus 10 restaurants and food outlets – including the high-end Melissa’s Food Shop.
Clothing brands like Timberland, Spitz and Forever New had been well received by shoppers and were trading strongly.
“The launch of Motion Fitness Health Club earlier this year has rounded out our complete lifestyle offering.
“Our aim is to make BT Ngebs City the destination of choice in Mthatha, and the 12.2% year-on-year growth in footfall indicates that we are on our way to achieving this,” he said.
He said the Billion Group had invested in the growth of Mthatha by spending R1.4-billion on the mega mall’s construction and a further R60-million on surrounding roads and infrastructure.
“The mall is the catalyst for a business and lifestyle precinct along the N2, which enters its second phase later this year with the opening of a four-star hotel adjoining the mall,” he said.
Similarly, the Billion Group’s R2-billion Baywest Mall in Port Elizabeth – opened a few months before BT Ngebs in 2015 – had also attracted a greater peri-urban market, according to Baywest management. — ziphon@dispatch.co.za
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