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At the

FOREFRONT of IT interface and opportunity

Leading IT retailer Matrix Warehouse is not selling just a name but an investment in a successful business model, Group MD Jan Boshoff tells South Africa Magazine. By Colin Chinery


nternet usage in South Africa is increasing at mega speeds. Seven million South Africans - 14 percent of the population - were connected to the internet at the end of last year, up from 5.3 million 12 months earlier. At least six million of us are currently browsing the net from our phones. “The market is growing all the time and people are being introduced to personal computers on a minute by minute basis. Yet the market in South Africa is largely untapped, and the potential in the individual or private market huge,� says Jan Boshoff, Group MD of


leading IT retailer Matrix Warehouse. Launched 11 years ago to address the need for a reliable computer shop, its wholesale and retail services range from computer hardware and software to networking, repairs, upgrades, new computers and complete IT solutions for home and business, all at highly competitive prices. All components used are registered brand name products ensuring a high standard of quality in the finished product, and Matrix Warehouse custom built computers boast a below average failure rate at less than 0.5 percent.

Matrix Warehouse FEATURE

Today Matrix Warehouse has a national footprint of 84 stores and is the biggest privately owned group in South Africa. Four years after opening its first store, in Alberton, Johannesburg in 2000, Matrix Warehouse moved into franchising, and today 73 of the 84 stores are franchises. “We were expanding but being asked why we weren’t opening even more shops. But if you haven’t sufficient staff to open them then the next step is to franchise. So there was a demand for it. And if we hadn’t franchised we certainly wouldn’t have achieved the remarkable scale of growth we have had.” In an intensely competitive market, the biggest factor that sets Matrix Warehouse apart from its rivals says Boshoff, is the personal attention given to its customers. “In each store we have a technical bench and when a customer comes in with a problem the customer can actually watch his item being

repaired or have any problem dealt with before his or her eyes. Most other companies will not do this.” Soweto information and communication technology firm Mavoni Technologies has just announced a partnership with international satellite company, O3B to bring high-speed internet to thousands of schools in South Africa’s rural areas. School access however is not always backed up by a home PC, and in response Matrix Warehouse has set up internet cafes in many of its stores. “It’s a service to the community where people come can in and work on PCs. And as well, hopefully, when the young people grow up and earn an income, they will buy from us as we are a trusted supplier through the years.” During a relatively short lifespan Matrix Warehouse has built a reputation for professionalism, quality and service, growing to become one of the top PC and networking


Matrix Warehouse FEATURE

AxizWorkgroup AxizWorkgroup is a newly merged IT infrastructure and software distributor that unites cutting-edge hardware and software solutions for small, medium and enterprisesized businesses. AxizWorkgroup has long standing relationships with leading global vendors such as Adobe, Acer, Asus, HP, Kingston, Intel, Logitech, Lenovo, Lexmark, LG, McAfee, Microsoft and Symantec. AxizWorkgroup is proud of its association with Matrix Warehouse.

organisations in the country. “If you supply good quality IT equipment at good prices you will emerge as one of the top companies, and this is what we are doing. Customer experience is great and our biggest growth comes through word of mouth.” Franchising is an increasingly popular and dynamic element in the South African economy. According to Bendeta Gordon of Franchize Directions, whose franchise research, ‘The Franchise Factor 2010’ has been tracking the growth of franchising since 1994, the best in class entrepreneurs sits in the franchise space. “If these operators sniff growth you can be sure a franchise business opportunity will emerge.” Franchising says Jan Boshoff, enlarges a company’s buying power. “The bigger you get the more buying power you have, the cheaper your pricing becomes, and the more competitive you are in your market.” So why should a prospective franchisee look to Matrix Warehouse? “Compared with other franchises our biggest selling point is that you get value for money. Buy another franchise and you might pay R750,000, the same as us, but we give you great value for your money R450, 000 worth of stock and we set up your entire shop ready to trade - full turnkey. “To get that kind of value from other businesses you are going to pay maybe double that. We are not selling you just a name, but you are investing in a successful business model and that is why people are investing in us – they are getting great value for money.” 4

Achievable gross margins are put at 30 percent on an average R750,000 turnover. Franchisees undergo a 28-day training course at the Alberton head office, with a further two days training on the point-of-sale system. Matrix has opened franchise stores in Soweto and other townships and, says Boshoff, gaining momentum on a monthly basis. “Black empowerment schemes have brought forward entrepreneurs who are doing very well. Around eight percent of our franchisees are Black, not a lot and it’s something we would like to grow.” But Government empowerment funding schemes are not helping. “Unfortunately the IT industry does not easily attract this kind of funding. They would rather invest in other business that is less competitive.” Why? “Your guess is as good as mine, but IT is not an easy business, in fact it is cut throat in a way. Pricing out there is very competitive, so unless the applicant has experience it’s not easy to be funded by these bodies.” As we spoke Jan Boshoff was driving to meet three franchisees who will be opening

shortly. “In an average week I get 15-20 applications and out of these I would probably approve about three maybe four. And out of those perhaps just one would have the necessary funding in place to carry on obviously this is biggest factor here.” IT knowledge or experience is not an issue. “This is like any business - the people who work for you are the important part. If you’ve got good business skills have good business acumen and can manage the people who work for you, then the IT knowledge will come in time.” After an initial strategy of opening stores in smaller neighbourhood shopping centres the focus has now changed to larger centres with greater foot traffic. “You have to grow and adapt to change, open where there are more feet, and the shop owners are having better success and earning more with a greatly increased turnover. Our objective over the next couple of months is to build to 100 shops. People who have grown up with us and come through our ranks are now starting out as Matrix Warehouse entrepreneurs.” END


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