How Choppies Emerged as an FMCG Leader in South Africa

How Choppies Emerged as an FMCG Leader in South Africa

Choppies, one of the most successful FMCG retail chain stores in South Africa, has grown exponentially in the last two decades. The company operates in the food and grocery sector in three major formats-hyper stores, superstores, and value stores. 'Choppies' stands for Charismatic, Human-oriented, Organised, Prompt Service, People-supported, Integrated Growth, Efficient Management and Success. Founded in 1986 by the Chopdat family in Botswana, South Africa, Choppies has seen significant success under the leadership of Mr. Ramachandran Ottapathu when he was appointed CEO in 2000. How the company grew from one supermarket in Lobaste, Botswana, to a big retail chain store in the African region is a story of continuous belief in its thought leadership values and its community. Let us look at some of the major highlights of the company in the market and its future retail strategies.

Growth Story

This Botswana-based company's revenue in 2017 grew by a staggering 33%. A company that started as a single store, now holds 212 stores across the region, with 98% indigenous staff. The network expands to 7 sub-Saharan countries with 12 distribution centres. In Botswana, 20% of Choppies' revenue is from its own branded products - about 50 of them, which include sugar, flour, rice, juice, maize and cooking oil.

The retail chain has grown to dominate countries like Kenya, Tanzania, Zimbabwe, Mozambique, Zambia and Namibia. In 2012, it was listed on the Botswana Stock Exchange, and in May 2015, it was approved for a secondary listing. In 2015, the company's turnover was BWP6 million ($533 million). The retail giant also acquired 36% of the market share.

In 2017-18, Choppies also showed a profit owing to its R 24.7 million turnarounds. The South African numbers also highlight a 42.4% year-on-year increase in turnover.

Efficient Management and Objectives contributing to its Success

Choppies expansion was primarily the result of its organic growth. In 2013, it bought MegaSave and SupaSave, and as a result of acquisition growth, the business grew profoundly. Choppies was also a success in rural South Africa. The enterprise’s strategy has been to target low to middle-income consumers, while also attracting middle to upper-income consumers. The establishment of the stores also generated employment opportunities that propelled the families working there to help increase the demand for consumption.

Some of Choppies core strategic objectives have been :

  • Offering consumers great value for money
  • Ensuring cost efficiency
  • Provide value adds
  • Provide fresh products
  • Regional and market expansion

Choppies has always aimed to address the socio-economic challenges faced by the African countries and has always provided low-income consumers with good quality products and satisfaction, at reasonable rates. The company's in-house logistics and distribution networks have enabled them to provide their consumers value for money, that has earned them great favour in various consumer segments. As part of its supply chain goals, the chain has geographically dispersed distribution centres to optimise operational efficiency.

The company continues to evolve to meet customer preferences, by tracking buying behaviour and capturing customer profiles to meet personalised needs. To achieve this, Choppies' trusted Point of Sale (POS) partner is iRetail Suite of services. The end-to-end retail POS provides the company with customer analysis, offline billing support and highly configurable retail analytics to streamline operations.

Sustainability & CSR Initiatives

Valuing and prioritising local partnerships and local communities has been one of Choppies’ most favourable mantras for success. Since their inception, their workforce has grown to include over 15,000 employees across Sub-Saharan Africa, with most of their staff belonging to local communities. It has also started farming support initiatives in South Africa, Zimbabwe and Zambia. Additionally, employees across branches are trained, to actively contribute to their skill development plans and initiatives.

In a recent report by Sunday Standard, the company has shared that it plans to strengthen some key areas going forward, including developing local business, upskilling the population and targeting environmental opportunities for sustainable practices. Recycled plastics, zero deforestation and harnessing renewable energy sources are some of the strategies that Choppies aims to innovate and implement soon. The report further states that the company also plans to partner with universities to provide advanced courses on retail management. Furthermore, the company is also committed to promoting women in business and has collaborated with several NGOs and support groups to take the initiative forward.

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