Pi Attitude Zone: Self-Fulfilment
Africa’s Middle Class Steps Forward
Many global marketers have had low expectations of their business prospects in sub-Saharan Africa, and accordingly have given those countries low priority in their worldwide market planning. Some, however, are realizing that such dismissive attitudes may be wrong.
Admittedly, there is a problem of relative poverty when comparing Africa to Western and many Asian and Latin American countries. Over one third of Africans still live on less than $1.25 per day. Infrastructure deficiencies make product distribution problematic. Brands have a difficult time establishing identity, recognition and desirability. This is partly because branded products are beyond the economic reach of many, and partly because African markets have for years been “advertising-poor”; lack of exposure to ad campaigns that the rest of the world instantly recognizes mean that even some famous global brands go largely unrecognized.
But a change has come to Africa, driven by economic advances and in particular escalating cellphone and television penetration. Market growth in Asia’s “Tiger” markets, like Taiwan and South Korea, has been matched and even outstripped by African “Lion” economies, Rwanda and Ghana among them.
The thing newly focusing global companies’ attention on Africa is the emergence of a new middle class, which the African Development Bank has defined as having between $2 and $20 dollars a day to spend on an equivalent basis. In the last decade or so, middle-class Africans have risen from little over a quarter of population to over one third. The group now measures around a third of a billion people.
And their emerging purchasing power, and purchasing habits, are making marketers sit up and take notice. Their taste is not only for imported goods, but also domestically-produced African goods spanning sectors from hair-care and cosmetics to local foods and economical detergent products that help reduce water-consumption.
Successful marketing formulas generally focus on consumer wants and needs, which in African countries can be highly specific, and different from global norms.
It is also crucially important to hit the right pricing-point. Local tastes are more likely to be indulged if the price is right.Zone: Self-Fulfilment Country: Middle East / Africa Product – Consumer Products