The report analysis the increasing significance of the African market, the diversity of the African consumer; as well as opportunities and challenges for companies operating on the continent across key consumer industry sectors across Africa.
The key findings of the report are:
Euromonitor also references the fact that Africa has some of the fastest growing economies in the world, a stat that is clearly making the rest of the globe take notice. The latest research puts Ethiopia, Rwanda and Mozambique as the fastest growing economies in real GDP terms, with growth rates above global averages.
The economic significance of Africa’s emerging markets is clear when one takes in the fact that South Africa and Nigeria, which led the pack as Africa’s two largest economies and account for 50% of the continent’s GDP, will account for just 37% of Africa’s total GDP by 2030.
Africa is forecast to be the most dynamic region for a variety of industries, including packaged food, consumer electronics, and beauty and personal care.
Just as important is that by 2030, Africa will have 16% of the world’s internet users, which Euromonitor says reflects growth of over 260% from 2017: “This makes Africa the fastest growing region for the number of internet users, creating compelling opportunities such as in mobile banking and online retailing," the report states.
Also above the global average, is the fact that the continent’s consumer spending will grow faster than the global average.
Euromonitor reports that much of the increase in Africa’s consumer expenditure will come from rapidly growing smaller markets, such as Ethiopia and Kenya, which are both expected to record consumer spending CAGRs of 8% over the 2017–2030 forecast periods.
Notable here is the rising and aspirant middle class and Africa’s youth bulge. What is new in the research, is that Euromonitor believes there is untapped potential at the “bottom of the pyramid”, which represents more than a third of Sub-Saharan African households in 2017.
“Though the most impoverished socioeconomic group in a country, it contains a mix of incomes, living standards and rural-urban locations, with varying levels of access to goods and services. To 2030, the African social classes are forecast to show largely similar rates of expansion, as the continent’s wide income gap is not expected to change over the long term. Thus, companies would be wise to look at ways to target this populous group in addition to the middle class.”
With the growth in population and positive economic prospects, internet usage becomes more important. Euromonitor predicts the rising number of mobile phones and internet banking has made it easier for African consumers to make internet payments, with key markets set to record growth rates well above the global average over the forecast period 2017–2022.
“Consumer categories to particularly benefit from the increase in internet retailing include media products, apparel, food and drinks, and beauty and personal care. Egypt, which is expected to see the highest growth in internet retailing to 2022, will see its strong growth primarily come from media products and food and drinks,” the report states.
Concluding, the report references internet retailing and m-commerce specifically as growing fast, requiring investment.
“Diverse frontier markets offer opportunities in a range of industries, at different consumer income levels, driven by population growth. GDP and consumer expenditure are also expected to grow, opening up lots of opportunities but long-term planning is key for companies to succeed in this market. Tapping into opportunities offered by both the ‘bottom of the pyramid’ (BOP) and the growing middle-class consumer bases will be key in certain African countries with tailored product and service offerings for each segment,” the Euromonitor report concludes.