Want to know how to start a clothing business in Africa? You’ve found the right article.
“Clothes make the man. Naked people have little or no influence on society” is one of my favourite Mark Twain quotes.
It’s no surprise that ten out of ten people you know will choose to stay hungry rather than go naked. Clothing is by far one of the most basic and essential needs of human beings regardless of social status and financial situation.
Both rich and very poor people share the common desire to cover and protect their bodies and to look attractive (if they can afford it). Every day, more than one billion Africans wear all kinds of clothing that was purchased from ‘somewhere’.
This article looks at the multi-billion dollar clothing market in Africa and all the lucrative business opportunities that lie within it.
We’ll also look at factors such as affordability, brands, quality and taste for local and foreign fashions that determine the choices Africans make about their clothing.
Technical note: Throughout this article, the term ‘clothing’ generally refers to any items used to cover or protect any parts of the human body. This loose definition includes all kinds of formal and informal clothing: underwear, shoes, socks, shirts, dresses, trousers and… we hope you get the idea!
Why is the clothing business in Africa booming?
The demand for basic and decorative (fashion) clothing in Africa is going through the roof and has created a multi-billion dollar market opportunity for business people.
Some of the obvious reasons for the huge demand for clothing on our continent are…
#1 – A large and rapidly growing population
Since wearing clothes is a basic need of every human, it only makes sense that the larger our population, the more clothes we will wear.
Africa has one of the fastest growing populations in the world with an annual population growth rate of nearly 3 per cent over the last 20 years.
With the world’s highest birth rate, our continent’s current population of nearly one billion people is expected to more than double in 40 years to 2.3 billion (source: Population Reference Bureau)
However, this huge population does not necessarily translate to buying power because nearly 60 percent of Africans are classified as ‘poor’.
But because poor people still need to wear clothes, used and cheap second hand clothing imported from America and Europe (discussed in detail below) have become a hot-selling billion dollar business in Africa.
This proves that Africa’s huge and fast growing population holds a lot of potential for clothing businesses now and in the future. It all depends on the segment of the population you want to target – rich, middle class or poor.
#2 – Africa has a young and fashion-conscious ‘middle class’
The African Development Bank describes ‘middle class’ as people who spend between $2 to $20 a day. At the moment, there are more than 300 million people on the African continent who fit into this category. These are people who live above the poverty line – but not yet among the wealthy.
A significant majority of Africans in the middle class are young and educated city people who are very aware of (and heavily influenced by) modern trends in western fashion. Because most of them hold salaried jobs or own a small business, these guys and ladies have more spending money at their disposal.
For them, clothing goes beyond the basic need to cover the body. Quality, style and outward appearance influence the type of clothing they spend their money on. This same behaviour applies whether they are shopping for themselves or someone else (kids, friends, family etc.).
As African economies grow and income levels improve, more people will join the middle class thereby increasing the amount of money the continent spends on clothing.
The 4 Key Sectors of the African clothing market
Yes, everybody in Africa needs clothes, but we do not all wear the same type of clothing. What we wear is often determined by local cultures, the latest fashion trends, our tastes and preferences for quality, design and how much money we are willing to pay for a piece of clothing.
This section looks at four key sectors of the clothing market in Africa that cater to the needs of different customers.
#1 – Used and Second hand clothing
Used clothing is very popular in many parts of Africa.
In Zambia, it’s commonly known as ‘salaula’ which means ‘selecting from a pile by rummaging.’
In Kenya, it’s called ‘mitumba’ meaning ‘onslaught’.
In Sierra Leone, it’s referred to as ‘junks’.
And in Nigeria, it’s popularly known as ‘bend down select’ or ‘okirika’.
Many Africans prefer second hand clothing because they are very cheap and sell at heavily discounted prices compared to new clothes. They also offer good quality fabric, top designer labels and unique styles and designs that appeal to Africa’s predominantly young population.
During the course of our research, I found (quite surprisingly) that women’s bras are one of the fastest and best-selling items on the second hand market as exporters in Europe find it difficult to meet the soaring demand.
According to Oxfam, the global charity organization, more than 50 percent of clothing worn by people in many sub-Saharan African countries are used and second hand imported clothing. It is no surprise that the value of used clothing sold in Africa is worth over $1.9 billion today.
Second hand clothing are ‘used clothes’ donated to charities and collection centres (as a way of disposing them) by ordinary people in North America, Europe and Asia.
These clothing are usually outgrown dresses and shirts, out-of-weather clothes and stuff that people in developed countries don’t need anymore. Many of these clothing are still in good condition (some of which are designer labels) although some of them are often damaged, stained or torn.
These charities and collection centres sort, grade and sell these clothes to major dealers who send them over to major ports in West Africa, East and Southern Africa. (photo credit: theguardian.com)
According to the short (4-minute) CNN video documentary you’re about to watch, millions of Africans buy used clothing imported from Europe and America because it allows them to own quality and expensive clothing at very cheap prices.
Visiting an open air second hand clothing market in Kampala (Uganda), CNN’s Robyn Curnow takes a deep look at the highly lucrative used clothes market in Africa.
As you will have noticed in the video, there are many people who strongly believe that imported second hand clothing is hurting local textile industries.
While some African countries have placed a ban on importing used clothing, the overwhelming demand in the market for this category of clothing makes it a very lucrative venture. However, we strongly advise that you check to confirm that dealing in second hand clothing is LEGAL in your country before starting this business.
How to start a second hand clothing business
The amount of capital you have to invest in this business really determines the level you’ll play at. We will run through all the players in the used clothing business so you can determine what level is best for you.
Major Dealers – These guys buy most of the clothing that is donated to charities or disposed at collection centres in the USA, Canada and Europe (especially Germany, Belgium and the Netherlands).
The major sources of second hand clothing to major dealers in the United States are the Salvation Army, Goodwill Industries, St. Vincent de Paul and Amvets. In Europe, the major sources are Oxfam, Terre, Humana and Abbey Pierre.
Major dealers are usually based in these overseas countries and have large facilities/factories where the huge volumes of clothes they buy are sorted and graded (according to size, gender, quality and condition) and packaged into large bundles known as ‘bales’.
There are normally different grades of bales with the highest grades selling for higher than the lower (rag) grades.
Becoming a dealer requires a lot of startup capital to take care of labour and machines (to handle the clothes) and a huge space (usually a warehouse) for storing all the bales until they’re ready to be shipped to customers.
Many of the major dealers in second hand clothing are listed on online marketplaces like alibaba.com.
Importers – These are the people usually based in Africa who buy bales from the major dealers (usually in container loads) and ship them to their locations in Africa.
An importer often needs someone overseas to help handle inspection of the bales before they are shipped to Africa. And depending on the bale grade you’re buying, the cost of one container load of used clothing from the USA can range from $12,000 to $25,000.
It’s my responsibility to remind you that several African countries like Nigeria and Tanzania have a ban on imported used clothing. As a result, a lot of smuggling goes on across the borders with neighbouring countries.
Importing second hand clothing into a country with an import ban is a very risky venture and you may lose ALL of your capital and suffer some penalties (such as imprisonment) if you are caught. As a result, we do not encourage this trade in such countries.
Wholesalers and Retailers – When an importer receives his container consignment of used clothing (which typically contains dozens of bales), he sells them at a profit to wholesalers who usually buy any number of bales.
Depending on your country and the grade and contents of a bale, a single bale can sell for anything from $100 to $500. Bales containing designer jeans, blankets, bed sheets and other high quality stuff usually sell for much higher.
Wholesalers often sell to retailers (who usually buy one bale at a time). Retailers usually own stalls in open air markets where they display the contents of the bale for people to buy. Some other retailers who can afford it often have a shop (boutique) where customers can walk in to try out their stuff.
Often times, these boutique owners wash and iron their clothes to improve their attractiveness and value to customers, and as a result, can ask for much higher prices.
Depending on the negotiation skills of a retailer and the things he/she can do to improve the value of their stuff, the prices they ask for a shirt, a bra, a pair of jeans or a lovely summer dress is entirely up to them. When the quality of the stuff in a bale is right, retailers can triple or quadruple their investment; although this is not always the case as some bales could have poor quality clothes (or rags) in them.
#2 – Locally custom-made clothing
In spite of the abundance and cheapness of second hand clothing, there is a thriving market of people who want custom-made clothes that are tailored to their body size, quality, taste and design.
This segment of the clothing market is made up of people who want to choose their own fabric and designs, people who want cheaper versions of designer labels, and people who want local African clothing. (photo credit: tenuci.blogspot.com)
Second hand clothing may be cheap and have good quality but most of the items available in that category are mass-produced.
Many Africans want a unique design and prefer to choose the fabric (cotton, wool, linen etc) their clothes are made of. As a result, there is a growing number of skilled tailors and dressmakers who satisfy the needs of Africans who want to stand out from the mass-produced clothing imported from abroad.
The entrepreneurs who enjoy this segment of the market provide a wide selection of fabrics and design ideas for customers to choose from and make the clothes to fit their unique size and taste.
There are several types of clothing that can be produced by these local tailors and the possibilities are only limited by their skills. These range from three-piece suits and wedding gowns to formal and casual shirts.
Another emerging trend supporting locally made clothing is African fashion. This involves unique designs using locally-made fabrics. These fashions are inspired by local cultures and trends and can vary significantly from country to country across the continent.
As a result, it is difficult for western clothing (such as second hand items and designer labels) to compete with this segment of the market.
The CNN video you’re about to watch is a short documentary on Sole Rebels, a local Ethiopian business that uses locally-produced fabrics and materials to make shoes.
Bethlehem Alemu, the young woman who left her Accounting job to start this eco-friendly shoe business is now the CEO of this company which makes over $1 million in footwear sales every year. Using hand-woven fabric from rural villages in Ethiopia, Sole Rebels exports its shoes to several countries including the USA, UK and Germany. Watch and learn…
How to start a local clothing business
There are basically two major ways to play in the local clothing business in Africa. It’s either you’re a dealer in clothing fabrics or you’re in the tailoring business, and we’ll explain.
Clothing fabrics and materials – This typically includes everything from making fabrics (the textile industry) to selling them to people who need them to make clothes. Due to high production costs and stiff competition from imports, the textile industries in many African countries do not produce a lot.
As a result, a huge portion of fabrics and materials used to make clothes in Africa are imported from Asia (especially China), the Middle East, Europe and America.
If you’re interested in importing these fabrics, alibaba.com is usually a good place to meet good potential suppliers. However, you must check to be sure your country has no bans on imported textiles and the fabrics you intend to import (cotton, wool, silk, linen etc.) are in high demand in the local market.
Despite the abundance of imported foreign fabrics in our markets, there are still hundreds of local craftsmen who make hand-made woven fabrics just like in the Sole Rebels video you just watched.
Local hand-woven fabrics and local designs such as tie-and-dye, batik and waxing have a unique advantage over foreign materials and will likely continue to be the unique selling point of most local African fashion brands.
Tailoring business – The tailoring business includes everyone who is involved in the activities that transform ordinary materials and fabrics into dresses, shirts, suits or any kind of clothing.
This usually requires some skill which can be learnt in formal schools, under an apprenticeship with an established tailor or fashion house, or by attending a fashion school.
There are a wide range of specialisations in this niche with different tailors focusing on formal or casual western clothes like business suits, shirts, skirts and trousers.
Some others specialize in local African attires, children’s and women’s clothing. While many businesses in the tailoring segment of the clothing market usually make clothes according to customer requests, there is a growing trend of local fashion houses making mass-produced clothes for the local market and for export.
It’s really not essential to become a skilled tailor before you can start a tailoring business. With sufficient capital and an understanding of the market, entrepreneurs can start this business by hiring skilled tailors from local communities or fresh graduates from fashion school.
This is exactly the model that is successfully operated in countries like China, Taiwan, Indonesia and Bangladesh where a lot of clothes are mass-produced.
#3 – Designer clothing
This category refers to any clothing (such as shirts, shoes, tops, dresses, suits, jackets, night wear, lingerie etc.) which bears the logo of a recognizable fashion designer.
Many of these designers are world famous such as Levi’s (jeans), Jimmy Choo (women’s shoes), Victoria’s Secret (lingerie), Ralph Lauren, Chanel and hundreds of others. Designer clothing is produced for the mass market and come in a wide range of designs, colours, patterns and styles.
Due to the strong names/brands behind them, designer clothing is the most expensive category of clothing and is preferred by people who want a sense of class and style.
As a result, the target customer segments for designer clothing in Africa are rich and middle-income working class people who are attracted to, and can afford these expensive clothing.
These customers often travel overseas to shop for their clothing or buy from local boutiques which stock original imported designer labels.
This category of clothing is also known for the high quality of materials and fabrics used to make them.
As a result, even after long use by their original owners, many of these designer clothing, which end up as second hand (used) clothing, still retain their quality and durability for several more years. (photo credit: eliteravshan.ru)
How to start a designer clothing business
Designer clothing is largely sold through branded stores and franchises around the world. Franchises are the easiest and cheapest way for designer labels to expand into new markets (like Africa) without making any significant capital investment or taking on any major risks.
The benefit of owning a franchise is that it allows you to enter this category of the clothing business using the leverage of a well-known fashion brand.
For the more popular and dominant designer labels, it’s usually very expensive to obtain a franchise license. In fact, many of them do not allow franchises and prefer to open their own fully branded stores. However, many of the smaller designer labels are more liberal and will usually sign up franchisees.
Another way to enter the designer clothing retail business is to open your own boutique and stock a wide variety of original designer clothing. While the franchise method can limit you to just one designer label, the advantage of having your own store is that you can stock a wide range of designer labels.
However, you need to ensure that you get your stock from very reliable sources. There is a growing trend of fake designer label imitations in the market (discussed in the next section) which can easily be confused with original designer labels.
To get original designer labels, most shop owners in Africa buy directly from overseas clothing retail stores during closeout sales.
A closeout, seasonal or clearance sale is a common practice in the USA and Europe where the remaining inventory of items in many clothing stores is sold off at the end of a season (summer, spring, or winter) to make room for new items.
A lot of these clothing are still in very good condition and often sell for up to a 50 to 70 percent discounts of the original retail prices.
#4 – Cheap imitations
There is a growing trend of fake imitations of designer clothing which are now selling in many local markets on the continent.
Although clothing in this category can be cheap and often looks very new, they are usually made from very low quality materials/fabrics that do not last for very long. These cheap imitations often tear or wear out quickly and the colours wash and fade away very fast.
Most times, the brand labels on these clothing are misspelled to copy popular designer brands. Under normal conditions, such sub-standard and fake clothing should never make it through African borders.
However, corruption and weak border controls make it very easy to import these poor quality clothing from Asia, the Middle East and Europe.
3 Things to consider before starting your own clothing business in Africa…
Every business has some critical factors that, if done right, will make it successful. The clothing business in Africa isn’t different.
In this section, we identify three factors you should consider before you start a business in clothing. Without a doubt, it’s a lucrative sector but ignoring any of the points in this section will likely lead to failure if you do not seriously consider them.
Here they are…
Location in the clothing business can often mean the difference between success and failure. By location, I mean the kind of people who live or work in the area you intend to set up shop.
For example, a second hand (used) clothing business will do well around a university campus. Young people (like students) usually want high quality and fashionable clothes that are affordable to their low budgets.
A second hand clothing store offers a ‘good deal’ to this segment of customers who will be happy to buy them and ‘show off’ to friends.
On the flip side, a designer clothing store located in an upscale neighbourhood will appeal to rich and middle-income customers who want quality and trendy clothing that befits their status. This kind of customers may look down on used clothing and usually will not want to buy it.
As a result, it is very important that you consider the income levels, social status, age bracket and behaviour of the population in an area before you locate your business there.
B. Trends, tastes and preferences in fashion
Clothing in many African societies is strongly influenced by the cultural, religious and social attitudes and behaviours.
Are people in your country conservative or liberal about the clothes they wear and how they dress?
Is the population fashion-conscious and aware of the latest trends in clothing designs and patterns?
Do people in your country prefer to wear tailored clothing made from local fabrics or are they more attracted to Western-type clothing?
Because fashion is a fast-changing industry, understanding the trends, tastes and preferences in your local environment is critical.
Clothing items and dressing patterns can become outdated and obsolete in a very short time. Watching out for these ‘vital signs’ is a great way to understand the needs of your customers while staying ahead of the competition.
Except the tailoring business which requires the unique skills of designers and tailors, all the other segments of the clothing business (such as dealing in second hand or designer clothing) require little or no skills.
The obvious disadvantage of most clothing businesses is that anyone with sufficient capital can open a designer clothing boutique or start a second hand clothing business in the open market. Since no particular skills are required, there is usually no difference between one boutique and another one down the road.
The key to excel in the clothing business is to look for a way to stand out. Be nice to your first few customers and try to build a long term relationship with them.
Because people outgrow their clothes very often and the latest fashion quickly gets out of fashion, clothing is usually a repeat business. Your loyal customers will often return to buy more clothing and will gladly recommend your business to friends, family, colleagues at work and neighbours.
Having a loyal customer base is a very cheap and easy way to advertise your business to potential customers while keeping the old ones.
It’s also important that you recognize the rising trend of internet-based clothing stores in many parts of Africa.
Online clothing retailers such as Jumia (now in Nigeria, Kenya, Ivory Coast, Morocco and Egypt) offer people the convenience of shopping from the comfort of their homes and offices through their desktop computers, laptops and mobile devices.
As internet and mobile phone penetration deepens across Africa, internet shopping is bound to increase thereby creating a very strong competition to physical clothing stores.
Ready to take on the clothing business in Africa?
Phew, it’s really been a very long article!
I am happy we achieved our goal of touching all the major categories of clothing in Africa and how you can start a business in each one.
As you now know, clothing over one billion Africans is, and will remain, a huge (multi-billion dollar) business opportunity. And by considering the three factors in the last section (location, customer preferences and the competition), it is our expectation that this business idea will work for you.
We believe that the opportunities identified in this article can be taken further by your creativity and energy. If you are confident a business in Africa’s clothing market will work for you, it’s important that you start taking action as soon as possible.
You could also choose from many more amazing business ideas in the Business ideas section of this website.
Please leave a comment in the section below or share this opportunity with a friend using the Facebook, Twitter and Google+ buttons below.
To your success!