African consumer habits are changing, with high-earning Africans doing most of their shopping in major shopping centers, visiting open-air markets only occasionally and mostly for cheap items such as bread, AllAfrica reports.
Super-affluent Africans go on shopping trips to Cape Town, Johannesburg and Europe for luxury goods and clothes, according to McKinsey & Company. Its 2012 report, “The Rise of the African Consumer,” explored the African markets, their consumers, and how best to serve them.
Sub-Saharans tend to be loyal to a specific brand while North Africans are loyal to several brands.
Accordingly, 35 percent of Sub-Saharan Africans say they are willing to try new products or services, while the same is true for 43 percent of North Africans.
When it comes to brand type, Sub-Saharan Africans have no problem supporting local brands while North Africans want international brands.
But the right brand means nothing to African consumers if it’s not delivered at the right price, AllAfrica reports. In Nigeria, for example, more than 70 percent of consumers say they regularly check rice prices. In Ethiopia, more than 50 percent of survey respondents say they spend a lot of time searching for the lowest-priced item when shopping.
Global management consulting firm AT Kearney produced a 2014 report that ranks the top five African countries for retail development. Its African Retail Development Index explores Africa’s retail landscape and the opportunities it presents. Nielsen did a similar study in 2012, All Africa reports. This report also includes information from the Nielsen analysis.
Retail sales in Gabon have grown steadily in recent years, but formal retail still makes up a tiny percentage of grocery retail. International brands have started to enter the country, which will bolster the formal retail sector.
Nigerian retail is predominantly informal. Consumers in this West African country shop for
anything from food to clothing and cell phones on street corners. Thanks to a burgeoning economy, however, this traditional picture of Nigeria is starting to change and supermarkets are becoming more popular.
Price-sensitive Ethiopians shop for groceries at kiosks and open markets several times a
week. Their shopping lists include basic commodities such as cereals, wheat and local ingredients but with income increasing, consumers are starting to shop at supermarkets and include packaged food such as pasta in their baskets.
Tanzanians make most of their household purchases from family-owned shops known as dukas. Supermarkets are popular, however, with higher-income Tanzanians and expats. About 20 percent of Tanzanians’ income is spent on packaged goods, especially beverages, and personal care items such as toothpaste.
Most Rwandan consumers base their shopping decisions on affordability and price, and they’re reluctant to change brands. Dry and packaged foods are generally bought from kiosks wile fresh food is typically bought at informal markets.
The rising middle class
One cannot study the African consumer without touching on its rapidly growing middle-class.
Deloitte compiled a report on this group in 2013 in which they stated that Africa’s middle-class
had tripled over the previous 30 years. One in three people were considered to be living above the
poverty line. Deloitte estimated that the African middle class will grow to 1.1 billion (42% of
the total population) in 2060.
It’s important to note that ‘above the poverty line’ does not indicate wealth. Many reports,
articles and studies have indicated that ‘middle class’ in Africa is, in fact, a very relative
term compared to other parts of the world.
That said, Africa’s rising middle class is exactly those people discussed earlier who are
developing modern tastes and sophistication. They own refrigerators, telephones, flat screen TVs
and automobiles. They’re aspirational, integrate technology into their lives and enjoy more
recreational time than those in lower income brackets. This is the group that deserves, and will
certainly receive, more attention in coming years.
