The golden continent and the ethics of luxury.
It is a struggle to reconcile the dichotomy of deep social concerns for our African continent, rife with poverty, and the light-hearted revelry and opulence associated with the luxury sector. This is particularly true as the global financial crisis has not yet loosened its grip, currency volatility remains erratic and unemployment figures remain high - these are uncertain and difficult times.
Outside of consumption patterns, in South Africa there is a tendency to downplay the employment opportunities generated by the luxury sector. The most obvious sectors to generate employment through luxury goods and services are the mining industry, through which a myriad of jewelry businesses are generated, and tourism where high-end hospitality and exclusive safaris show South Africa at its best. But aside from these two monoliths there are in fact many other areas of growth.
The multi-billion Rand boat building industry employs over 3000 permanent employees that has seen South Africa recognized for its high-end catamarans worldwide. BMW is a leader in the manufacturing of luxury cars and has recently announced further investment of R2 billion into 'BMW World Plant Rosslyn', its South African facility. They anticipate that the upgraded plant will be capable of producing up to 60 000 units per annum.
Global luxury forecasts for 2012 seem optimistic, particularly for those businesses focused on growth markets. The 2011 Global Wealth Report by Credit Suisse comments that in many respects, South Africa is the model for many other African economies. Household wealth has grown vigorously over the last decade, quadrupling in value from US$8,400 in 2000 to US$34,300 in mid 2011. Global Wealth overall is showing an upturn led by increased wealth in South Africa, China, India, Brazil, Australia, Chile and Indonesia.
That is not to say that the volume of HNW individuals is homogenous, indeed it varies radically between these rapid emerging markets - China boasts 1,017,000 US Dollar millionaires (and 5,000 with a wealth of over US$50 million) and South Africa sports a comparatively meagre 71,000 US Dollar millionaires. Fortunately we too have a few exemplary billionaires who have travelled to space, built luxury empires, not to mention the obvious financial and mining empires.
Small and medium enterprises, well recognized in academic and policy literature for their economic and social importance, are perhaps where our craft-centric culture and the luxury industry could interest a government seeking job creation. There are many exemplary domestic luxury brands generating employment as well as being ambassadors for Brand SA. Avoova, for example, creates functional art and collectible items from the best fragments of ostrich eggshell that are carefully laid down as a fine veneered finish used as a decoration for objet d'art from bowls and bars to billionaires yachts. In doing so they support 40 artisans in the Karoo. For leather goods, Cape Cobra Leathercraft, who employs ninety people from the local community.
A new generation of designers has been born that has taken our raw materials and transformed them into world-class lines that are in global demand. Hanneli Rupert, daughter of Johann Rupert, has recently launched Okapi. The energetic, talented young designer, is a firm supporter of the potential job creation through luxury on our golden continent and as such she has committed to supporting local manufacturing and where necessary purchasing machinery to do so. She uses local suppliers in the creation of her new exotic handbag range with signature horns and has sourced rare leathers and materials from across Africa.
One often overlooks the impact of high-end consumption and disregards the more obvious arenas such as the gourmet sector, championed by master-chefs like Margot Janse, Reuben Riffel and Giorgio Nava, that employs and trains staff for numerous restaurants. Beyond fine foods, consumers are presented with an ever greater number of fine wines and spirits from farms and niche distilleries, that are reaching a new price echelon, whilst creating employment in the winelands and broader drinks sector.
South African fashion is achieving international acclaim - from Gavin Rajah to Malcolm Kluk, home grown labels have not only a solid local following but are being welcomed to the world run way from Paris Couture to New York Fashion Week. The work by Precious Moloi Motsepe, wife of billionaire Patrice Motsepe, in creating Africa Fashion International has seen the emergence and strengthening of many African couturiers and labels.
South Africa boasts a wealth of diamonds and gold but the bulk of manufacturing and finishing happens internationally. Johannesburg based African Romance has invested in local diamond finishing and the training of diamond polishers to retain value in South Africa. With the mining industry constituting one third of GDP, an estimated 50% of the world's gold reserves in SA and a huge 10 million carats annually of diamonds mined annually (with 90% of the diamonds being exported), it stands to reason that we should look at methods to retain value locally.
The Southern Africa Luxury Association, through the SALA Artisan Accelerator, has recently worked with Keith White to develop an initiative to build up the expertise of black jewelry designers, taking them through an apprenticeship to become master jewelers. De Beers Shining Lights Awards is another noteworthy program supporting the industry that has recognized his talents and those of other jewelers using our natural resources for world-class finished products.
Luxury eco-tourism in South Africa is globally revered and companies like the Mantis Collection and &Beyond are spearheading a sustainable, considerate view of engaging with nature at the top level.
Businesses which take a more thoughtful view of luxury and succeed in carving out a unique niche for themselves, with consideration for people, planet and profit, will be firmly entrenched on the road to success by adhering to a new definition of local luxury that exemplifies 'Proudly South African'.