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The growth of Africa’s consumer markets presents an opportunity too big to ignore.
For companies looking for growth via emerging markets, Sub-Saharan Africa looms large. Since 2000, Sub- Saharan Africa has experienced a compound annual growth in consumer spending of 4 percent, reaching nearly $600 billion in 2010. Consumer spending is expected to rise to nearly $1 trillion by 2020. Accompanying the growth are rapid improvements in income levels, infrastructure and the business environment that promise continued growth as a consumer market.
Companies will have to adjust their strategies and expectations when entering Africa. Logistics can be unreliable and infrastructure lags much of the developed world. Furthermore, understanding the diverse nature of opportunities in Africa can be challenging. As a result, many executives planning on entering Africa want to know why Africa’s consumers are an attractive proposition, which segments they should focus on and how they can capture the market’s potential most effectively.
Based on its research and experience, Accenture has constructed a broad segmentation of Sub-Saharan consumers:
Our segmentation identifies five broad consumer segments:
Accenture estimates that Working Families will represent 33 percent of the total Sub-Saharan African market opportunity by 2015. The largest group will remain Basic Survivors at 45 percent, followed by Rising Strivers (16 percent), Cosmopolitan Professionals (3.1 percent) and the Affluent (2.8 percent). Even though Cosmopolitan Professionals and the Affluent will remain a relatively small portion of the market, their spending power translates into a significant opportunity for luxury products and services. As the African economy continues to mature, these segments are likely to grow more rapidly.
Companies in search of high performance must be explicit about Africa’s role in their broader corporate strategy; which African countries it makes sense to enter; and the timing of that entrance. The market-entry plan also should illuminate the company’s specific goals and how progress will be measured.
Based on its experience and research, Accenture offers a simple seven-step framework to build a business in Sub-Saharan Africa:
Accenture has its own network of offices in Africa and is helping many of its clients to enter these exciting growth markets. Contact us to find out how we can help your company to reach this next frontier of growth.
September 7, 2011
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