The number of Africans at all income levels who are able and willing to buy a range of products may be larger than many companies believe, according to a new report released by US-headquartered consultancy The Boston Consulting Group (BCG) on Thursday.
Africa’s booming middle class, with its recently acquired purchasing power, has been linked to the strong economic performances of many African countries since the end of the 1990s, and is driving a new wave of foreign direct investment in the continent.
BCG’s 2013 Africa Consumer Sentiment Survey, which polled 10?000 consumers across eight of the continent’s largest countries, bodes well for international retailers targeting African markets, BCG principal Lori Spivey said in a statement.
“According to the survey, 60 to 90 percent of consumers in each of the eight African countries we visited expressed a strong desire to buy more things every year – higher than the averages in Brazil, China, and India, and twice the percentage of consumers in developed nations,” Spivey said.
“Only 30 percent of African consumers say that they already have enough things – a much lower percentage than in other developed and developing nations. This suggests a pent-up demand for new products and services.
“Overall, the market for new products and services in specific African nations appears especially attractive as new consumer classes emerge,” said Spivey, who co-authored the BCG report based on the survey, titled Understanding Consumers in the “Many Africas”.
‘Not just one monolithic Africa’
According to the report, the BCG survey supports the theory of not one but many consumer classes emerging across the continent, showing that while brands are powerful in Africa, favourite brands vary by country and age group.
“Our research reinforced the fact that there is not just one monolithic Africa,” said BCG partner Stefano Niavas, also a coauthor of the report. “Rather, the continent is a collection of many different countries, markets, and consumers with sometimes similar aspirations but often different and specific needs.”
Africans ‘knowledgeable, diligent’ consumers
The survey also found that African consumers are highly brand conscious compared with consumers in other countries around the world, reporting a strong and complex emotional connection with their favourite brands.
Almost 70 percent of people survey said they feel that brands represent who they are, validate and communicate their personal values, and provide a sense of belonging, compared with only 40 percent of consumers in Brazil, 29 percent in China, and 24 percent in developed markets.
One unexpected finding of the survey, according to BCG, is that brands remain important in Africa even as people’s income declines.
“African consumers are both knowledgeable and diligent in their decision-making process: 70 percent said they knew a lot about the details of the products they buy. And almost 75 percent save and cut back on spending in other areas to pay more for products that are important to them.
“As a rule, African consumers will trade up for quality and trade down to economize and stretch their budgets.”
While these findings suggest that many well-known global brands already have a head start in Africa, they also indicate that, to succeed on the continent, global brands will have to create “an emotional connection with target consumers along specific dimensions, such as values, beliefs, and family – even more so than in other countries”.