Africa is set to be the next big consumer market

Africa is set to be the next big consumer market with demand driven by the growth of the middle class and rise in disposable income.

Proper due diligence on distributors and partners in these countries lack significantly. Some companies still prefer to fly their exports teams to investigate high potential countries and find distributors. More often than not, they reach an agreement but are usually one-off in nature and not sustainable for continued growth. Local players eagerly look for long term investors and continued business. With the African Continental Free Trade Area (AfCFTA) agreement officially entering into force, improving B2B matchmaking is one of the top priorities on the agenda. AfCFTA will be the largest trade zone in the world (1.2 billion people) increase intra-African trade by 52% by the year 2022, remove tariffs on 90% of goods, liberalize services and tackle other barriers to intra-African trade.

african consumer 300x150 Africa is set to be the next big consumer market

Why Consider the Consumer Market at the Continental Level 

Looking at the consumer market on a continental level allows companies to compare between different consumer markets in the region and strategize their growth accordingly. According to Fraym, 95% of the consumer class resides in just 20 out of the 54 countries. For example, Nigeria has about 52 million people in the consumer class, but Togo has fewer than 2 million consumers, presenting a very different market environment for investors and consumer-facing companies. 

 

These differences also present between cities. Lagos in Nigeria and Johannesburg in South Africa top the count with over 8 million consumers, and Kinshasa in the Democratic Republic of Congo and Luanda in Angola have more than 4 million. Since most African consumers live in cities, companies should focus their market research on cities rather than countries. 

 

from web

Romano Pisciotti

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