Partnering for Success: Retail Expansion in Africa

Africa Advisory Group spoke with Ranjith Ravindranathan, the chief operating officer at Botswana-based grocery retailer Choppies. Mr. Ravindranathan discussed the importance of strong team management skills and shared tips on how to find the right partner when entering new markets.

Choppies started in Botswana, has stores in Zimbabwe and South Africa and is building its first outlets in Zambia and Tanzania. The retailer is also finalizing its entry into Kenya. By the end of 2016, Choppies plans to have 200 stores in over six countries. Choppies currently operates 125 stores. Standard Chartered Private Equity took a 13% stake in the firm in 2014 and last month the grocery chain launched a secondary listing on the Johannesburg Stock Exchange.

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Photo source: Choppies’ 2015 interim report


Q: What’s the most important part of your job as COO?

Mr. Ravindranathan: The most important thing as head of operations is to manage a large number of people. You need to manage your employees. It’s a make or break relationship. As a leader if I don’t manage that well, I will be going into disaster.

Q: Are there different cultures in countries that require unique approaches to people management?

Mr. Ravindranathan: The South Africa operation is more system oriented. In most of the stores we have professionals who likely worked for other retail chains before. They are used to the more system-oriented approach. In Botswana, you are more people oriented. You tend to place a lot of value on trust and less reliance on the system. The kind of management has to be different.

Q: When entering a new market, what’s one of the most important leadership considerations?

Mr. Ravindranathan: The important thing is to have a good reliable partner. That is the key element we look at before we decide to enter a new country.

Q: How do you find a good partner?

Mr. Ravindranathan: The partner doesn’t have to be from the FMCG space. They could be successful operators in manufacturing or real estate. It’s not specific that they should be in retail. Sometimes we want someone not already in retail. Our private equity partners help us here. They’re already invested in markets we want to enter and can recommend reliable partners. Then we talk to a lot of people.

Q: What makes a good partner?

Mr. Ravindranathan: Countries have strict retail legal rules. We need a reliable partner who know the rules.

Choppies entry into Zimbabwe came through the acquisition of 10 Spar stores in Bulawayo. The retailer is concluding discussions with another local partner it plans to form a joint-venture with as part of its entry into East Africa.

“We’re in a growth phase for another four to five years at least,” Mr. Ravindranathan said.

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