Interview of Martine Ghnassia by Terri Cohen, CPP Luxury : Retail trends in sub-Saharan Africa
You have produced an outlook study on sub-Saharan Africa for makers of luxury goods: Luxury & Retail Trends in Sub-Saharan Africa, and on the significant development of luxury goods consumption in this region. Could you tell us about the key factors driving growth in this part of the world?
Since the beginning of the 21st century, the African continent has seen a period of robust economic growth, supported by high commodity prices, increased foreign investment and improved economic and political governance. But because it is clearly defined, Africa is an easy target for generalizations which are often reductive and one-dimensional. It’s time to see it differently, time to walk away from stereotypes and embrace its full potential. The term “untapped potential” is often bandied about when it comes to Africa, but when we drill down to the reality, the numbers speak for themselves. And while it remains fragile, it is making progress as it undergoes a complex process of transition.
Sub-Saharan Africa has emerged in the last 10 years as the second-fastest growing region in the world and is projected to maintain this position to 2020 (Source: Euromonitor). All growth indicators are positive: a demographic boom, a rapidly expanding young population, the growth and increased wealth of the middle class, the financial independence of women, urbanization (in 2030, of the 41 mega-cities on the planet, 6 will be African, with 4 in the sub-Saharan zone), development of the hyper-rich (the number of HNWI with more than 1 million US dollars in assets has doubled in 15 years and should be up 45% by 2024), and accelerated penetration of new technologies and smartphone use.
Africa is poised to become the world’s second-fastest growing region for the consumption of luxury goods. In terms of sub-Saharan Africa, its luxury markets are expected to grow by 30% over the next 5 years, making it a future El Dorado for luxury brands (Source: Euromonitor).
Which countries in Africa are most ready for the development of luxury goods and fashion, in what order of importance and why?
The “Luxury & Retail Trends in Sub-Saharan Africa, InCapsule by Ifop ” study, which we carried out for our luxury customers, is based on an analysis of open data, interviews with professionals and experts in the region, and decoding of local marketing strategies. It allowed us to identify 5 promising countries for luxury brands in sub-Saharan Africa, each with different levels of maturity.
The map below provides a summary of our findings:
1. South Africa “The Established” is tipped as the gateway to the continent’s luxury market, largely due to its well-established shopping culture, increased international exposure, significant innovation, relatively stable and transparent pricing, and convenience.
About fashion: The local fashion scene in South Africa has grown rapidly over the past couple of years with some brands capturing much attention on the global fashion circuit. This increased visibility is helped by a flourishing fashion week that attracts buyers from around the globe. KISUA, MASHOSA BY LADIUMA NGXOKOLO, RICH MNISI and MMSOXAXWELL are fashion designers emerging on the international scene.
Key marketing drivers: #shopping mall culture #aspirational purchasing drivers #strong local brands #digital mindset
2. Kenya “The Steady Grower” is strategically positioned as the ‘gateway to East Africa’ and generally seen as one of sub-Saharan Africa’s most advanced countries.
About fashion: Today, the fashion industry enjoys contributions from first-rate designers, with a more subtle aesthetic than in other African countries. Local talents such as AMI DOSHI SHAH, DEEPA DOSAJA and ADELE DEJAK are developing in a country where they have to compete with traditional tailors and bespoke outfits.
Key marketing drivers: #mature retail #low key culture #investment luxury #local talents #open to new tech
3. Nigeria “The Burgeoning” is Africa’s biggest economic power. Home to the largest population and GDP in SSA, its market size is a hugely important factor, making it difficult to ignore the opportunity.
About fashion: Strong local fashion is the key word. Often characterized as colorful and dramatic, Nigerians see adornment as a way of expression. With Nigerian fashion designers gaining acclaim worldwide, it is impossible to ignore their growing influence on the global landscape. Main local talents: LISA FOLAWIYO,
ADE BAKARE and ORANGE CULTURE attract fashion-conscious clients.
Key marketing drivers: #fashion conscious clientele #vip life style #strong local fashion
4. Angola “The Unexploited” has become an increasingly popular investment destination due to its strong economic growth and emerging high-end market.
About fashion: Growing fashion awareness thanks to the Luanda Fashion Week created in 2014. It mostly features Angolan, Brazilian and Portuguese brands with the main goal of making all of Angola’s fashion talents known to the whole world.
Key marketing drivers: #expanding infrastructure #booming interest in luxury goods #cash based economy
5. Ivory Coast “The Underdog” is Africa’s fastest-growing economy as it is now on the path to peace and prosperity with a strong macroeconomic environment and a solid position in international markets.
About fashion: Ivoirians have less of a penchant for foreign brands. Local designers offer extraordinary designs combining African roots with “modernization”, a unique culture in comparison with neighboring countries that follow a more traditional approach. LAURENCEAIRLINE for men and WOODIN are brands building a bridge between African roots and contemporary needs.
Key marketing drivers: #immature retail #vibrant clothing culture #fashion creativity #traditional media
Do Africans favor local upscale brands over designer European brands? If so, which ones?
The latest trends show that Africans are increasingly keen to embrace local or international brands provided that they can adapt their business models, their messages and methods of expression to African culture(s), but also target consumers who have a genuine appetite for consumption and an unwavering curiosity about brands. These developments represent a real opportunity for companies that want to grow their market in this region.
Using our local trend hunter network, we analyzed the strategies of more than 80 local and international luxury and premium brands based in South Africa, Kenya, Nigeria, Angola and Ivory Coast. This allowed us to identify 13 key factors that companies must master if they want to develop a winning strategy in sub-Saharan Africa.
We reveal some of our must-haves for success below.
INSIGHT #MADE FOR AFRICA
With Brassivoire, Heineken opened a brewery in Ivory Coast that crafts a new product specifically addressed to the Ivorian market.
INSIGHT #HERITAGE WITH A TWIST
For its latest Maxhosa x Nivea collaboration, the designer embraced astonishing patterns and colors of his Xhosa heritage in a modern way (South Africa).
INSIGHT #EMBRACE NATURAL
Beauty brand, The Kinky Apothecary, created the Nigerian Natural Hair + Beauty Show to change ideals of beauty and support women who are going against the mold. This initiative encourages African women to embrace their beauty in its natural state, from curly hair to natural skin (Nigeria).
INSIGHT #USE LOCAL AMBASSADORS
Nespresso turned to micro-influencers to create awareness around their different ranges of coffee, highlighting how the products fit into their everyday lives through use of social platforms.
INSIGHT #MADE IN
The WearZim LoveLocal campaign encourages designers to collaborate with diverse markets to increase quality and encourage Zimbabweans to wear local products.
INSIGHT #EMPOWERING WOMEN
African Odyssey is an empowerment summit aimed at young professional women in the fashion and beauty business to engage and learn from those who have done it before (South Africa).
Do buying habits related to luxury and fashion goods vary from country to country?
The mapping of the 5 countries based on their level of maturity shows that purchasing and consumption trends vary from one country to another as these are determined by the development of retail, the presence of brands, the development of media, and the cultural influences of the country.
While affordability remains an issue for many consumers in Africa, these emerging aspirational attitudes are a sign of the growth of consumerism, particularly among the younger, urban and more affluent population.
- QUALITY FOCUS: Despite low income levels, consumers attach more importance to the quality of products than price. For fashion and cosmetics products, quality is often linked with international brands. 75% of customers save and cut back on spending in other areas to pay more for products that are important to them (Source: BCG).
- BRAND CONSCIOUS: As seen in developing markets, luxury brands are used as a symbol of status and wealth, creating demand for designer labels and heavily logoed products. 1 in 4 young consumers claims that buying well-known brands makes them feel good (Source: BCG).
- MEET LOCAL TASTE: Brands should seek to adapt their offerings to meet local tastes. There’s a clear desire among high spenders to mix traditional luxury with artisanal, DIY and singularly local experiences. 70% of consumers feel that brands need to represent who they are, validate and communicate their personal values and provide a sense of belonging (Source: BCG).
To sum up: for an international brand to succeed it must adapt to local conventions, work collaboratively, encourage local initiatives, establish a presence while respecting local tastes, not impose models from elsewhere, and target women with an entrepreneurial outlook. Adopting these approaches can only appeal to Africans, but companies should also pay attention to promoting the marks and symbols of international brands, particularly as Africans are strongly attached to the logos of international brands, viewing them as a sign of social success.
To find out more about the “Luxury and Retail Trends in Sub-Saharan Africa” study: click here
The interview is published by CPP Luxury.