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June 13, 2015

Looking Beyond the Obvious in Sub-Saharan Africa, Part 2: The Rise of E-commerce

Bernadette-KissaneAnalyst Insight by Bernadette Kissane - Apparel and Footwear Associate

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The building blocks for future developments in e-tailing are emerging in sub-Saharan Africa, as a growing middle class and young population create a demand for products that store-based retail simply cannot meet, due to a lack of shopping malls and gridlocked cities. Advancements have been most notable in Nigeria where a surge in telecom investments and smartphone purchases has fuelled growth in internet usage from 20% in 2009 to 41% in 2014. Furthermore, according to Euromonitor International data, Nigeria boasts the largest online market for apparel and footwear in the region, which is expected to grow from US$104 million in 2014 to US$1,077 million in 2019, mainly due to the dynamic development of trusted e-tailers, Jumia and Konga.

Meanwhile, South Africa, the region’s largest apparel market overall, is expected to record a much slower pace of growth in internet retailing from US$50 million in 2014 to US$73 million in 2019. This highlights consumer preference to use the internet as a research tool, and purchase items in store as a result of the mature formal retail environment.

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June 5, 2015

African Crude Oil Producers Struggling with Fossil Fuel Prices

Oil-pumps-banner

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African crude oil producers are facing challenges as a result of low oil prices.  These countries are facing budget revisions and storage shortages, which mean that they need to look beyond Europe for strategic trading partners. This podcast discusses potential alternative actions plans and strategies. Listen for complete insights.

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June 4, 2015

Nigeria in Focus: Dynamic Baby Diapers Marketplace

Victor AjibolaAnalyst Insight by Victor Ajibola - In-Country Research Analyst

As Sub-Saharan Africa’s largest and increasingly diversified economy, with rising disposable incomes and levels of education, urbanization and ongoing investments into infrastructure development, Nigeria’s marketplace has seen significant growth across a number of consumer goods, including absorbent hygiene products. Within retail absorbent hygiene, nappies/diapers/pants is the largest category by value and volume in the country.        

Per capita use of nappies/diapers/pants in Nigeria remains very low, compared to developed markets, thereby creating a foundation for further expansion.

Consumer purchasing patterns shaped by available disposable incomes  

The nappies/diapers/pants penetration rate in Nigeria stands at around 5%. Disposable nappies are hardly ever used in the rural areas, which represent half of the Nigeria’s population. Even in urban areas usage is often restricted to occasions like outings.  Additionally, many families are too poor to afford nappies/diapers on a regular basis and stock in bulk. Instead, they only buy the products when they can afford them and in small quantities they can afford at the time of purchase.      

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May 30, 2015

Africa: Beer’s Final Frontier

Amin AlkhatibAnalyst Insight by Amin Alkhatib - Alcoholic Drinks Analyst

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Africa is the final frontier for beer, according to Euromonitor International’s latest global briefing Africa: The Final Frontier for Beer. It is a relatively untapped territory, despite the noteworthy presence of SABMiller Plc and Heineken NV in key African markets and in upcoming dynamic ones. Across the continent, brewers face underdeveloped infrastructure and low profit margins as a consequence of consumers’ generally low purchasing power. However, they should not dismiss its growth in beer volume sales and potentially future higher profit margins, driven by macroeconomic progress and demographic growth. Brewers themselves will bring about development in this market in the short to medium term, by implementing strategies such as the beer affordability ladder and investing in future markets to take advantage of low-base growth. Brewers will thus significantly grow their footprint in the region and boost their volume sales globally.

Africa-Beer

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May 27, 2015

The Growth of Affordable Small Appliances in Emerging Markets

Affordable small appliances enjoyed growth from 2009-2014, mainly due to increased disposable incomes as well as increased appearance awareness. Unlike developed markets like in the US, France, Germany and Japan where luxury convenience products have posted high growth, price sensitivity remains a key factor in emerging markets.

Thidathip TawichaiVideo Features Thidathip Tawichai - Consumer Appliances Research Analyst

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Looking Beyond the Obvious in Sub-Saharan Africa, Part 1: Venturing North in Store-Based Fashion Retailing

Bernadette-KissaneAnalyst Insight by Bernadette Kissane - Apparel and Footwear Associate

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For many fashion brands, South Africa has been the stepping stone into the sub-Saharan region due to the attractive economic growth and affluent market. But has the time now come to start expanding north? According to Euromonitor International, sales through apparel and footwear specialists in Nigeria and Kenya are expected to grow by 93% and 57% in constant 2014 value terms, respectively, from 2014 to 2019, highlighting growth opportunities outside the wealth-hub of the region. This is the first of a 2-part series of articles that sets out to examine growth drivers in the region, as well as the competitive landscape in store-based retailing; the second article will review dynamic growth in e-commerce.

Continue reading "Looking Beyond the Obvious in Sub-Saharan Africa, Part 1: Venturing North in Store-Based Fashion Retailing" »

May 24, 2015

Top 3 Drivers of Consumer Expenditure in Emerging and Developing Economies

An HodgsonAnalyst Insight by An Hodgson - Income and Expenditure Manager

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With emerging and developing countries accounting for nearly 90.0% of the global population and in the context of sluggish demand growth in developed markets, insight into what drives and shapes demand in emerging markets is vital in helping businesses grow and succeed. Euromonitor International forecasts that between 2015 and 2030, real consumer spending growth in emerging and developing markets will be three times faster than in developed markets. The top three drivers of this long-term gain will be population growth, rapid urbanisation and rising incomes.

Population and Consumer Expenditure in Emerging and Developing Countries: 2009-2030

Consumer-Expenditure

Source: Euromonitor International from national statistics/Eurostat/UN/OECD

Note: Data for 2015-2030 are forecast; Consumer expenditure data are in constant 2014 prices, fixed exchange rates. 

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May 17, 2015

Adapting Hot Drinks Brands to Fit Multi-Channel African Retailing

Howard TelfordAnalyst Insight by Howard Telford - Senior Beverages Analyst

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The dual development of modern retail channels and sustained prominence of traditional points of sale are important variables influencing packaged hot drinks in Africa. As the chart below demonstrates, there is a great disparity among African markets in the development of modern outlets in hot drinks retailing, which include supermarkets and convenience stores. Small, independent and informal retailers that serve low-income consumers still constitute the majority of drinks retailing volume in the continent, particularly in sub-Saharan Africa. This traditional channel of sale demands flexibility in terms of price, package size, promotion and delivery in order to reach the vast majority of low-income African consumers. However the uneven but significant growth of modern channels in urban hubs must also play into the complex multichannel strategy of hot drinks brands in Africa.  Big and small, multipack and single-serve, affordable and premium: is it possible for new, foreign entrants to build mass appeal in such a disparate retailing environment?

Hot-Drinks-Retail-in-Africa

Source: Euromonitor International

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May 2, 2015

The Evolution of Domestic Tourism in Sub-Saharan Africa

Ronald-MapiyeAnalyst Insight by Ronald Tinashe Mapiye - Research Analyst

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Euromonitor International spoke at the annual World Travel Market Africa in Cape Town recently and provided some insight into Domestic Tourism in the Sub-Saharan Africa region. Travelling is generally perceived to be none essential across most African countries, as such many people do not engage in the activity. There has been less investment from most governments across the region to encourage travel amongst locals and limited competition in terms of airlines operating in most African markets. The cost of travel is generally very high in Africa in terms of transport and accommodation and therefore limited income often restricts frequency of travel.

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April 18, 2015

Nutrition Snapshot: South Africa in 2014

Emi_nutCountry_southAfrica-v1.0

The average South African purchases 771 calories a day from packaged food and soft drinks, with bakery, oils and fats and dairy being the top three contributors. Bakery is the leading source of protein delivering up to 8g per day, 3g more than dairy. 6g of fibre is purchased daily from packaged food and soft drinks. Despite 46% of the South African population currently being overweight and obese, by 2019, each person is expected to buy 95 calories more per capita per day.

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Recent Posts

Looking Beyond the Obvious in Sub-Saharan Africa, Part 2: The Rise of E-commerce

African Crude Oil Producers Struggling with Fossil Fuel Prices

Nigeria in Focus: Dynamic Baby Diapers Marketplace

Africa: Beer’s Final Frontier

The Growth of Affordable Small Appliances in Emerging Markets

Looking Beyond the Obvious in Sub-Saharan Africa, Part 1: Venturing North in Store-Based Fashion Retailing

Top 3 Drivers of Consumer Expenditure in Emerging and Developing Economies

Adapting Hot Drinks Brands to Fit Multi-Channel African Retailing

The Evolution of Domestic Tourism in Sub-Saharan Africa

Nutrition Snapshot: South Africa in 2014