AndhraNews.net
Home » Business News » 2014 » March » March 13, 2014

African Consumers Are Optimistic and Eager to Spend, but Selective and Highly Conscious of Brands -- Even at Lower Income Levels


March 13, 2014 - Johannesburg, South Africa

The number of Africans at all income levels who are able and willing to buy a range of products may be larger than many companies believe, according to a new report by The Boston Consulting Group (BCG). The report, titled Understanding Consumers in the "Many Africas," is being released today.

BCG's 2013 Africa Consumer Sentiment Survey, which polled 10,000 consumers across eight of the continent's largest countries, provides a quantitative database that supports the theory of not one but many consumer classes emerging across the continent. In addition to exploring the current spending behaviors of African consumers, we asked about what they intended to purchase and how much they planned to spend with regard to more than 20 different product categories, ranging from appliances and automobiles to clothing and snack foods. Taken together, the findings paint a clear picture of Africa's emerging consumer classes -- and what it takes to reach them.

"Our research reinforced the fact that there is not just one monolithic Africa," explains Stefano Niavas, a BCG partner and a coauthor of the report. "Rather, the continent is a collection of many different countries, markets, and consumers with sometimes similar aspirations but often different and specific needs."

Embracing Consumerism

According to the survey, 60 to 90 percent of consumers in each of the eight African countries we visited expressed a strong desire to buy more things every year -- higher than the averages in Brazil, China, and India, and twice the percentage of consumers in developed nations. Only 30 percent of African consumers say that they already have enough things -- a much lower percentage than in other developed and developing nations. This suggests a pent-up demand for new products and services.

It's not surprising, then, that the majority of respondents said that they intend to spend more over the next 12 months -- mostly on durable goods such as apparel, cars, and consumer electronics rather than on perishable food and grocery items.

"Taken together, these findings bode well for companies targeting African markets," notes Lori Spivey, a BCG principal and a coauthor of the report. "Overall, the market for new products and services in specific African nations appears especially attractive as new consumer classes emerge."

The Power and Promise of Brands

The survey revealed that brands are powerful in Africa, but favorites vary by country and age group. A one-size-fits-all approach won't work on this diverse continent. One unexpected finding is that brands remain important even as income declines. Quality, performance, and familiarity were the top reasons given for choosing a brand.

African consumers are both knowledgeable and diligent in their decision-making process: 70 percent said they knew a lot about the details of the products they buy. And almost 75 percent save and cut back on spending in other areas to pay more for products that are important to them. As a rule, African consumers will trade up for quality and trade down to economize and stretch their budgets.

African consumers are highly brand conscious compared with consumers in other countries around the world, and they report a strong and complex emotional connection with their favorite brands. According to our survey, almost 70 percent of Africans feel that brands represent who they are, validate and communicate their personal values, and provide a sense of belonging, compared with only 40 percent of consumers in Brazil, 29 percent in China, and 24 percent in developed markets.

These findings suggest that many well-known, global brands already have a head start in Africa. But to succeed there, global brands will also have to create an emotional connection with target consumers along specific dimensions, such as values, beliefs, and family -- even more so than in other countries.

To download a copy of the report, please go to www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.

About BCG's Center for Consumer and Customer Insight
The Boston Consulting Group's Center for Consumer and Customer Insight (CCCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG's various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCCI is sponsored by BCG's Marketing and Sales and Global Advantage practices. For more information, please visit www.bcg.com/expertise_impact/capabilities/center_consumer_customer_insight.

About bcgperspectives.com
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.

The Boston Consulting Group
Eric Gregoire
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701
gregoire.eric@bcg.com

MarketWire

Comment on this story

Share