Empirical data indicates that South African grey market is especially strong in the computer and electronics consumer goods, with iPads, iPods, iPhones leading the pack.
Grey market, consisting of genuine brand name items that are imported outside official manufacturer distributors, is booming in South Africa. Due to the very nature of this sector, no one can measure its exact size.
How one looks on grey market largely depends on which side one happens to stand.
Distributors and retailers who re-sell grey products are for, because they make a profit on this trade.
Manufacturers and official distributors are against, and point out that grey imports are not supported by appointed agents and are not covered by official warrantees.
As for consumers, they are mainly for, because grey market enables them to acquire otherwise unavailable items, or to buy the officially available ones at lower prices.
Empirical data indicates that South African grey market is especially strong in the computer and electronics consumer goods, with iPads, iPods, iPhones leading the pack.
And there’s a good reason for it.
Take the case of iPad 1. It took almost a year for it to travel across the Atlantic and reach South Africa, at the time when rumours about the imminent release of iPad 2 were already ripe. Not surprisingly, local early adopters were not prepared to wait that long. They flocked to independent sellers and to the South African online marketplace, bidorbuy, which has been for years one of the outlets for selling and buying the grey market merchandise.
The delay in the official South African release of the second and third generation iPads was much shorter and measured in weeks, not months. For example, iPad 3, launched mid-March 2012, is expected to hit the South African shores on 27 April 2012.
Of course, some consumers continue to buy grey even after the product's official launch, because it is cheaper.
According to one research, figures compiled from retailers show that South African have bought 205,000 iPads 1 and 2 during the two years since the device was launched in April 2010. About 20,000 were sold on the grey market or bought on overseas trips; official distributors have sold 150,000 units; and First National Bank moved 35,000 devices through a special offer to their own customers.
For years, grey market had been poorly regulated in South Africa, to the detriment of consumers, who were often left without any warranties. That changed with the new Consumer Protection Act (CPA), which came into force on 1 April 2011.
The CPA stipulates that grey market imports must be clearly labelled and provides for an implied dealer’s warranty of at least six months, making it easier for shoppers to return faulty goods for repair, replacement or a refund. The retailers who are found flouting the law face stringent penalties: a R1 million fine or 10% of turnover, whichever is the greater.
However, in their eagerness to lay hands on the newest at the lowest price, consumers can fall pray to the illegal market in counterfeit goods. Many say that this is where the real problem is, and not in the grey market, which they essentially see as an alternative channel that provides consumers with more choices than being limited to one provider.
