For global business expansion, Africa presents great platforms for distribution and retail in the consumer market ecosystem.
Gradually, changes in the demographics and business improvement are cutting across the African continent, a result that has seen a rise in household consumption, (in the next eleven years, close to $2.6 trillion would have been expended).
7 African countries, Nigeria inclusive, will take a significant number in the population of the continent, while having a rise in the percentage of Africans, moving up the rung of the ladder, to the middle and upper class.
A rise in the demand for goods and services ought to encourage more business owners, in terms of introducing their products. With the gradual rise in income levels at the different points in the socio-economic group, opportunities for production, delivery, and investments, abound.
Africa’s consumer market is expanding daily and it is brewing with multiple investment opportunities for exploration. Here are a few of them:
Indications show that Africa is the fastest growing mobile telecom market in the world. Since the turn of the new century, the continent has seen an approximate 30% annual increase in mobile phone connections.
Behind Asia, Africa is the second largest mobile market in the world. The E-commerce space in the African market was valued at $5.7 billion in 2017 and moving upwards in 2018.
This revenue will see an increase because of a rise in the number of internet users across the continent.
Recently, Jumia, an African online retail company, just got listed on the New York Stock Exchange.
This is an indication that the purchasing power on the continent is increasing with mobile phones and internet connections.
Indications have also shown that one in five of the consumers around the world, would live in Africa, moving forward into the next decade.
A craving for foreign-produced goods will surge, due to a growth in the section of the middle class.
In Nigeria, more than five cities already boast of a population of more than 1 million. This will see an increase in healthy competition for distribution chains and retail centres.
The fluctuations of oil prices across oil-producing African states may contribute to an increase in market share value of luxury goods.
An eventual growth in GDP per capita will call for a greater purchasing power in all strata of the population.
Considering this, retailers of luxury goods should not take a second guess in considering this opportunity.
Fast Moving Consumer Goods
Fast moving consumer goods, at low cost, are at an incredibly high demand. This presents opportunities for businesses to increase their consumer base.
In the past ten years, food, beverages, and home appliances have seen growth in their sales in the consumer market.
Indications have shown that moving forward to 2020, the middle and lower class in Africa would have a combined disposable income of about $680 billion.
The countries on the Eastern part of Africa have also shifted its focus, towards more of formal retails, a result of the growth in the distribution service sector.
Countries like South Africa, Algeria, Kenya and Nigeria, which are prepared for production, distribution, and investment, as they have shown, by their growth potentials.
Entrepreneurs need to look into this opportunity, so, as to get hold of the momentum in Africa’s consumer markets.