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Why Australia is the new frontier for South African expansion

Posted in Business & Finance by Adam Morgan on 3 April, 2025 at 10:50 a.m.
In an unexpected twist of corporate strategy, a growing number of South African companies are casting their eyes toward the sunburnt shores of Australia. This isn't about chasing kangaroos; it's a calculated move driven by regulatory harmony and the lure of familiar communities down under.

Regulatory alignment provides smooth sailing
Australia's business environment is often lauded for its stability and innovation-friendly policies. Matt Adam-Smith, Partner & International Business Centre Director at Grant Thornton Australia, highlights the nation's "safe, stable political and regulatory system" and "low levels of red tape," making it an attractive destination for businesses seeking expansion. This regulatory synergy is particularly appealing to South African firms accustomed to navigating complex bureaucracies. The streamlined processes in Australia offer a breath of fresh air, allowing companies to focus on growth rather than getting entangled in red tape.​

Expats provide a ready-made market
Beyond the boardrooms and balance sheets, there's a human element to this corporate migration. Australia boasts a vibrant South African expatriate community, providing a ready-made market familiar with the brands and services from back home. Support groups like "Hopping Down to Aus" have become vital resources for newcomers, offering practical advice on everything from housing to job markets. This cultural familiarity allows South African companies to hit the ground running, tapping into networks that ease the transition and foster brand loyalty among expats yearning for a taste of home.​

Trailblazers leading the charge
Several South African enterprises have already made significant inroads into the Australian market:
Nando's: The flame-grilled chicken aficionado has been spicing up Australian palates since 1990. With plans to open an additional 70 restaurants by 2030, Nando's is doubling down on its commitment to the Australian market.
TFG (The Foschini Group): This fashion retailer reported an 8.4% rise in third-quarter sales, with its London segment experiencing a 45.5% surge, partly due to strategic acquisitions.
Aspen Pharmacare: The pharmaceutical giant has expanded its footprint through strategic acquisitions, including purchasing Sigma Pharma in Australia for $1.24 billion in 2011, bolstering its international presence.
Aveng: Originally rooted in South Africa, this engineering and infrastructure company has extended its operations across Australia, New Zealand, and Southeast Asia, demonstrating the viability of South African expertise on the global stage.

However, the journey isn't without its bumps. Companies like Woolworths Holdings have faced headwinds, reporting a 24.8% decline in first-half profits due to weaker performance in their Australian and New Zealand clothing businesses. This underscores the importance of understanding local market dynamics and consumer preferences.

The southward migration of South African companies to Australia is more than a fleeting trend; it's a strategic manoeuvre leveraging regulatory ease and cultural ties. While the path is fraught with challenges, the potential rewards make it a journey worth undertaking. As these businesses find a new market, their success will hinge on adaptability, local engagement, and a dash of that indomitable South African spirit.

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