The findings come in a report from the firm entitled ‘Shifting Market Frontiers: Africa Rising’, which can be accessed here.
“Africa’s two largest economies, Nigeria and South Africa, account for nearly 50% of the continent’s GDP in 2017. However, by 2030 these two countries will represent just 37% of Africa’s total GDP, demonstrating the rising economic importance of Africa’s emerging markets,” says Euromonitor.
“Given the continent’s large population and strongly increasing GDP, Africa is set to be the most dynamic region for various industries, which include packaged food, consumer electronics, and beauty and personal care.”
6 key findings
The following have been picked out in the report as its key findings.
1. African population growth, increased urbanisation and expenditure presents opportunities
Africa is the world’s second most populous continent. Its growing young population is expected to command nearly 20% of the world’s population by 2025.
Equally, rapid urbanisation and fast-growing consumer expenditure provides long-term opportunities.
2. Consumers are diverse and a “one size fits all” approach will not work
Africa’s 55 independent states are home to a diverse population of different income groups, religions, races, customs and languages.
This diversity requires a more granular and regional approach for a successful and sustained market entry.
3. A flexible long-term strategy is required to succeed in the continent
Despite signs of growing GDP and consumer expenditure, the challenges of the continent, such as lack of infrastructure, paucity of skills and political instability, require a flexible and long-term approach.
4. Local companies offer strong competition
Local companies are seasoned experts with a wealth of knowledge, which give these companies an advantage over global competitors.
Lessons can be learnt from their approach to business, or partnerships should be considered.
5. Growing technology in the region
The rising adoption and development of technology provides new ways of reaching consumers. Africans are increasingly connected, with high mobile penetration—reaching one billion in 2017.
This offers opportunities in various consumer industries, which include finance, apparel, food and drink, and beauty and personal care.
6. Modernisation of retail alongside informal retailing
Modern retail outlets are increasing at a rapid pace. However, a large proportion of retailing still takes place in traditional stores, open-air markets, street kiosks and even at the side of the road.
Understanding how these markets operate and why consumers choose these channels is important.