According to World Bank estimates, the continent is home to one billion people and its population is expected to increase to more than two billion by 2050.
Perhaps more crucially, it has an estimated young population – between the ages of 15 and 25 – of 226 million. A PwC report titled “So Much in Store”, an in-depth study of the sub-Saharan Africa retail and consumer goods industries, contains compelling findings.
It provides a five-year outlook by focusing on 10 African economies that PwC believes offer substantial opportunities for retail and consumer businesses looking to expand into African markets.
These include Cameroon, Ethiopia, Kenya, Nigeria, Tanzania, Zambia and Ivory Coast. Despite a slowing Chinese economy and lower commodity prices having a knock-on effect on real gross domestic product growth, there is a silver lining.
The growing consumption patterns of the middle class in Africa have been driven by several factors, such as an increase in internet use and accessibility; ubiquitous use of social media; access to private healthcare, and the blossoming of shopping malls.
Consumers in sub-Saharan Africa in particular are becoming more brand-conscious and aspiring, willing to satisfy their needs and wants at a whim, provided they can afford a purchase.
“Africans are becoming more connected to global trends than ever before, as a result of growth in internet penetration and travel,” PwC retail and consumer leader in Africa Anton Hugo says. There has been a spike in consumer discernment levels, stimulating these retailers to create new products. PwC says there are several misconceptions about doing business in Africa.
Africa has 55 countries, so it is vital companies seeking to enter African markets conduct research on the ground to gain an understanding of the specific region or country, instead of applying a one-size-fits-all approach to countries.
Despite the challenges that can impede higher growth figures in retail and consumer businesses in Africa, PwC says the opportunities far outweigh the difficulties.
Enormous opportunities are yet to be realised: retail trade is still largely concentrated in informal markets; the online retail industry is in its infancy, and intra-African trade penetration is low.
