A new study by Nielsen, a reputable international market research organization has revealed the potentials of the growing consumer base in Africa and the implication on brands entering the market.
In a report by Nielsen’s Ailsa Wingfield on Emerging Markets Thought Leadership, the global research organization analyses the fast-growing African middle class, which represents a dynamic, ever expanding consumer base.
In the Nielsen report, titled Perspectives: Who Exactly Is Africa’s Consuming Class, Ailsa Wingfield says:
The term “untapped potential” is often bandied about when it comes to Africa, but when we drill down to the reality, the numbers speak for themselves. Africa is home to 54 countries, 1.3 billion people, the world’s second-fastest growing economy, millions of retail outlets and rapid urbanisation—more than 55 African cities have populations of more than 1 million people, 80% of which have mobile subscriptions. These cities are also seeing steep smartphone ownership growth rates.
While describing the notion of the middle class in Africa, she said:
The African Development Bank ballparks the continent’s middle class between 60 million (upper middle class, able to spend between $10 and $20 per day) and 420 million (total middle class, able to spend between $2 and $20 per day), depending on which definition of middle class you use. But is the middle class really everything it’s cracked up to be? Is it a mountain or molehill?
In sub-Saharan Africa, Nigeria has the biggest absolute middle-class population (able to spend between $2 and $20) at 42 million people, while Ethiopia/Kenya and South Africa’s middle class populations are almost equal, at 21 million and 24 million, respectively. But aside from these select countries, the average middle-class population per country in Africa ranges between 1 and 8 million people (i.e., 60 million-420 million split across 5 The average middle class income in Africa is only $4,000 per annum (India is similar), compared with $8,000 in China.4 countries).
Nevertheless, less than 20% of consumers in Africa are able and willing to purchase branded products.