Analyst Insight by Bernadette Kissane - Apparel and Footwear Associate
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" »
Analyst Insight by An Hodgson - Income and Expenditure Manager
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
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.
Continue reading "Top 3 Drivers of Consumer Expenditure in Emerging and Developing Economies" »
Analyst Insight by Howard Telford - Senior Beverages Analyst
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?
Source: Euromonitor International
Continue reading "Adapting Hot Drinks Brands to Fit Multi-Channel African Retailing" »
Analyst Insight by Ronald Tinashe Mapiye - Research Analyst
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.
Continue reading "The Evolution of Domestic Tourism in Sub-Saharan Africa" »
Fears over commodity prices have failed to derail the Africa Rising narrative and the region continues to elicit strong interest from consumer goods companies. Its strength remains in its potential, with a young population and some of the world’s fastest-growing populations. Its consumer markets are seeing strong growth, driven by an increasing urban middle class.
Here are some key facts about this region:
Continue reading "10 Facts About Sub-Saharan Africa" »
Analyst Insight by Ronald Tinashe Mapiye - Research Analyst
Customers are generally influenced by a series of issues when making purchasing decisions. This is true across the globe, and as such Sub-Saharan Africa consumer is no different. However, in Sub-Saharan Africa, one finds that some factors that influence consumers’ purchase decisions are unique to this region.
Demographics play an integral role in the decision making of the Sub-Saharan Africa consumer. In a market like Nigeria, there is little racial diversity as the black race makes up the majority of the population. This makes it relatively easy for food manufacturers to target consumers as a common food culture and consumption pattern can be easily identified. There are less ethical issues to address where there isn’t much diversity, although you find that there are also limited opportunities to diversify in a country that is not multi-racial. South Africa, on the other hand, has much more opportunities for retailers to diversify as the country has multiple races. Since people are exposed to many cultures, they are more open minded to trying out different foods and therefore it makes it relatively challenging to enter markets such as food retailing and apparel, as a clear understanding and knowledge of the market is needed.
Continue reading "The Impact of Country Specific Demographic Factors on Consumer Behaviour in Africa" »
With China continuing to slow, the oil price around US$60, and other key commodities down – including tea, gold and copper - some of Sub-Saharan Africa’s largest economies are facing strong headwinds this year.
Real GDP Growth in the 10 Largest Sub-Saharan Economies in 2015
Source: Euromonitor International from national statistics/Eurostat/OECD/UN/IMF
Note: Data are forecast
Continue reading "Sub-Saharan Africa Can Ride Out Commodity Price Losses" »