by Ailsa Wingfield. Africa’s vast potential is the stuff of investors’ dreams; however, capitalising on that opportunity is less about identifying or quantifying prospects and much more about execution, stemming from knowledge, insights and data to enable on-the-ground success.

The phrase “untapped potential” is often bandied about when it comes to Africa but, when we drill down to the reality, the numbers speak for themselves: home to 54 countries, 1.3bn people, the second-fastest growing economy, millions of retail outlets and rapid urbanisation — over 55 African cities have a population of more than 1m people, of whom 80% have a mobile subscription coupled with steep growth in smartphone ownership.

It all starts with the consumer

In addition, Africa currently has up to 500m people who spend more than US$2 day and, within this, a middle-class potential of between 60m and 420m people (African Development Bank), depending on the definition that you use. But is the middle class really everything it’s cracked up to be? Is it a ‘mountain or molehill’? In sub-Saharan Africa, Nigeria has the biggest middle-class population potential at 42m, while Ethiopia/Kenya and South Africa’s potential is almost equal, at 21m versus 24m people respectively. But it’s interesting to consider the fact that the average African middle-class population per country is anything between 1m and 8m people ie 60m or 420m split across 54 countries.

In comparative size, China and India’s middle-class populations are roughly the same in size and range of potential as the African middle class but the latter’s average income is only US$4 000 p/a (India’s is similar), in comparison to China’s, which is US$8 000. Added to the disparity is that this income is spread far and wide, and Africa’s consumption story will be different to other emerging markets.

What’s not to like?

It’s therefore clear that the foundation is there, and there is certainly no debate about the base of opportunity. But, within the broader middle-class definition, it’s important to drill down even further for greater clarity and look at Africa’s rising consuming class who spend more than US$10 per day. Globally, this class represent a massive rising-emerging market opportunity, which by 2025 will see the world’s consuming class swell to 4.2bn (53% of the population) and account for 50% of consumption spend.

In Africa, today’s comparative consuming class is just 120m people or 10% (versus 35% globally), accounting for 31% of income and closer to 40% of spend. However, in the near-term, this figure could double as the lower middle class (US$4-10) incomes stabilise and, in the longer term, this could expand to 40% to include the mass middle class of variable potential — those with fluctuating spending ability between US$2-4 per day — and in the more distant future there are a further 720m people who live a subsistence life (below US$2 per day). It’s therefore clear that these growing markets represent massive potential for spending to increase exponentially and rapidly as political, economic and social advancement continues and consumers’ circumstances improve. Businesses need to consider the current as well as the future — five-, 10- and even 20-years’ time — and develop product portfolios, media and retail strategies which serve today’s consumer needs and build for the future consumer-purchasing potential into their planning.

A matter of mindset

As part of this reality check, it’s important to move beyond income and demographic numbers. It’s, first and foremost, about understanding the diverse and evolving consumer spectrums. It’s about how consumers live, shop, buy, interact and experience products; what influences this; what they watch; and the impact of technology.

Together with mindset, we need to be cognisant of the consumer realities and how this translates into opportunities for brands. Within Africa, the consumption-needs spectrum far exceeds the product spectrum and the brand spectrum. It’s important to appreciate that the branded product is not usually the starting point of the ability to consume. In understanding the ability to consume today and tomorrow, it brings in to question what is a brand’s mandate/role, and at which stage of the need state are businesses prepared or able to tap into? Unfortunately, this is where many new and existing businesses have fallen short, as less than 1/5 of consumers are able and willing to purchase branded products. This leaves a massive range of consumers who are fulfilling their needs beyond the branded format. With an in-depth understanding of consumer needs, businesses will be able to adapt their offerings to match those needs, across a broader spectrum and build equity for the future.

Build a reason and they will buy

Another million-dollar question is whether businesses build or fulfil a reason to purchase or simply bring a brand from other emerging markets and anticipate that Africa’s consumers will buy the same? The reality is that success is about more than just bringing another affordable or available product. Marketers and manufacturers need to look at the specific consumer’s day-to-day life and identify a need to solve. With deep analysis, many unmet needs may be identified, whether based on tradition, taste preference, new needs, ease of use, scarcity, accessibility, health and wellness, aspiration or sustainability, and differentiated products brought or optimised for markets and consumers to fulfil these roles.

Opportunities across the continent

It’s therefore clear that untapped opportunities exist across the continent — whether viewed in absolute or relative potential — for current and future consumers. The key is to identify where it will be easier to execute based on overall consumer potential and ask these questions to ensure success:

  1. Which part of the consumer needs spectrum is your mandate? Are there opportunities to extend purchasing beyond the brand to build for future loyalty?
  2. Do you have the right products? Can you adopt, adapt or innovate to match the market and consumer specific needs?
  3. Can you reach your consumer through tailored marketing and media? Can you optimise your retail execution, distribution and activation in the stores that matter most?


Ailsa WingfieldAilsa Wingfield is head of thought leadership across Nielsen’s Emerging Markets, with responsibility for curating strategic, forward-thinking content to help clients future-proof their business. To look at opportunities in comparative ways, Nielsen has created seven consumer groups across 17 countries to identify and understand consumers and how to tap into them, based on behaviour, propensity and the brand, media and shopping drivers.

“Motive” is a by-invitation-only column on Contributors are picked by the editors but generally don’t form part of our regular columnist lineup, unless the topic is off-column.

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