The South African hardware market is a constantly changing, dynamic sector. The SA Government’s commitment to provide every man with a home has created an opportunities for those who can supply quality hardware at affordable prices. Mica Hardware is taking up these opportunities and is now looking to grow in sub-Saharan Africa. We talk to the company’s 30 year veteran and CEO, Nareen Daya to find out more about Mica’s story and its industry-leading offering…
Two of the key markets for Mica Hardware, small to medium contractors and industrial clients, have fallen on tough times recently as the challenges of a slow local and global economy have started to build around the country.
The company, founded in 1985, has over 140 stores nationwide and employs around 2200 people, all specialised in DIY and hardware and customer service – working by the motto ‘let us show you how’.
Growth since its formation has been fast and wide-spread and the building and construction industry, along with the DIY sector, provided the company with a strong platform to build on.
In short, until the start of the global financial meltdown, Mica had it good. The company had hit the nail on the head when it came to providing a broad range solutions to customers.
In 2009, when the financial crash began to take full effect around the world, South Africa, especially the construction, building and hardware industries, was somewhat shielded because of the huge amounts of money that had been poured into preparations for the 2010 FIFA World Cup.
But today the economy is feeling the pinch. The World Cup is now a memory and builders, construction companies and contractors are lowering their prices to take a cut of the much smaller market.
As we have already discovered, the IMF says that SA is only set to grow at 0.7% and the national treasury said at the end of last year that “employment growth and household income constraints are holding back consumption”.
These circumstances do not make business easy and Mica Hardware CEO, Nareen Daya says that times are certainly more challenging. But even through the trials, the business has managed to maintain itself and, because of an effective model, is planning on growth in the future.
“The last few years have been very difficult,” he says. “The conditions in the global economy have made things difficult. Obviously, we’ve had local challenges to review as well. Importantly, we’ve seen more competition, especially from global competitors coming into the market.
“The competition makes things difficult, especially when they’re corporate organisations with lots of money to spend. There’s been shifts in demographics around stores which means there has to be changes and we have to market different products to different consumers. Peoples needs have changed, people have moved, there’s been a shift in who has money so it has been a few years of adjusting.”
BUILDING IN 2016
Mica does hold a leading position in the SA market and works towards the vision of ‘continually re-engineering and innovating, to be at the forefront of new developments in the retail hardware industryand thereby maximising the overall benefit of the Mica Group to all of the Mica stakeholders’. As such, the company has protected itself during in the slow market.
“As a group we have coped well and we’ve been able to defend our market share to a large extent but it’s always a challenge,” explains Daya.
“We are investing in our supply chain and other business so we are growing and spreading our investment portfolio.
“In 2016 we are focussing on stabilising the business and growing. We want to take advantage of any opportunities that present themselves.”
By focussing on the renowned ‘4 P’s’ of marketing (Product, Place, People, Promotion), the company has built a strong growth strategy for the coming 12 months and beyond.
Product-wise, the company has an unbeatable range and includes some of the biggest brands in the business. “We believe in bringing top quality brands that are local and function appropriately in the South African conditions,” the company says. Its portfolio includes products from Plascon, Bosch Ryobi, Heunis Steel, Dulux, Voltex, Yale, Stanley, Webco and many more.
Place-wise, Mica has positioned itself as the ‘around the corner’ hardware store, with each outlet very much focussed on its local community.
The company’s people are DIY experts who can answer any questions a customer may have and this helps drive repeat business.
“The store owner runs the store and he has a vested interest in the business and gives the best possible service to the customer so we have the element of great service,” says Daya.
From a promotional point of view, Mica is pushing its business through multiple channels and has not made the major mistake that many companies make during tough times and cut its marketing.
“We run monthly promotions, localised promotions and we do a broad sheet which advertises all the categories that we sell. We do TV advertising, we do magazine advertising and each store runs localised advertising campaigns in their communities. We are also trying to push our social media effort,” explains Daya.
TURNING THE SCREW
Despite the aforementioned economic climate, Mica has its sights set on growth in the future. The company’s 140 stores across SA give it the largest footprint of any DIY or hardware retailer in the country but resting on laurels is not in the nature of this innovative and ambitious organisation.
“We would like to double the number of store across the country, we want to make the stores larger and we want to open stores in southern Africa,” says Daya.
“There’s always opportunities to grow depending on market conditions, stability in other countries and whether you can trade effectively. Other countries are very different to South Africa but some have similar infrastructure; the fact is, there is huge potential in the rest of Africa,” he says.
As the company expands its footprint further into Africa and continues to develop its product offering and customer service capabilities, this will be a business that rides out the problems in the economy and comes through in an extremely strong position, remaining South Africa’s first choice for DIY and hardware supplies.