Africa is a continent full of global curiosity, a growing
consumer base, modern aspirations, entrepreneurial ambition and homegrown
innovation. While there are plenty of challenges – from energy supply and
infrastructure to health and education – a growing labour force and emerging
middle class promise new opportunities for the continent, and for brands
willing to invest the time and money.
We see key trends to watch for this continent on the move:
Moving Millennials
The continent’s population of 1.1 billion is set to grow to
2.3 billion by 2050. And contrary to global trends, Africa’s demographic is
getting younger; currently around 43% of Africa’s population is under the age
of 15.
Young Africans are optimistic, independent, outward-looking,
proud of their heritage and connected. While they have an appetite for global
trends, African music, fashion, art and literature, in particular, are also
finding new audiences worldwide, through the efforts and entrepreneurial
ventures of young Africans. Brands can also tap into these areas if they enable
and encourage this two-way dynamic and foster new, creative collaborations
between global and local.
Moving up in the
World
The number of millionaires in Africa (160,000) is growing at
double the rate of elsewhere in the world. But for more brands, it is the
rising middle class that present the biggest opportunity. In Sub-Saharan
Africa, there are more than twice as many people considered middle class today
as 30 years ago; which equates to 45 million households with discretionary
income.
However, there are still tough choices to make in how to
spend that – with many consumers using up between 10% and 20% of their monthly
salary on pre-paid air time. As the cost of connectivity continues to come
down, disposable income will increase. But consumers still want to buy inspirational
and localized goods, rather than products that have been re-purposed or
recycled for a secondary market.
Moving to the City
You can watch the pattern of consumer spending change with
almost 200 new malls anticipated in the next two years. This is also a result
of another major trend: urbanization. By 2050, 60% of Africans will be living
in cities or urban areas, opening up new communication channels and access to
consumers for brands.
Life in a thriving African city isn’t always neat and tidy,
nor easy. Lack of transport infrastructure means a lot of people spend hours
commuting, while poor electricity services make it hard to charge mobiles and
get online. So companies that can solve a problem – providing entertainment on
Taxi TV or free WiFi and charging stations – can broaden a brand’s reach and
win over customers.
Moving to Mobile
Most Africans will have their first experience of the
Internet on a mobile device, as smart phones and tablets will account for four
out of five broadband connections in Africa in 2019. Statistics can confuse, as
mobile penetration swells to more than 90% by 2020, while unique mobile
subscribers will reach 504 million (a 49% penetration).
Ownership of multiple phones is a commercial practicality
(getting the best deals on different networks at different times of day), as
well as a statement of consumer power and choice. While networks need to stay
on their toes to retain loyalty, consumers vote with their phones – and mobile
operators are often the top Facebook pages, with likes and shares showing the
huge impact and appreciation of the ability to connect.
Moving in to the
Future
There are upwards of 170 technology hubs across Sub-Saharan
Africa. Entrepreneurs are working on products and services in every sector:
education, health, agriculture, energy and more. Start-up competitions are
attracting students and seasoned business people to solve some of the biggest
problems people face day to day. Understanding this dynamic, working with
entrepreneurs on the ground, will help brands focus and tune in to where they
can make an impact.
Success stories like M-Pesa, the most successful mobile
financial service (MFS) in the world with more than 17 million users in Kenya,
has enabled numerous core products and services and attracted global attention.
Brands should be aware that 63% of mobile money services currently provide an
API to third parties, so brands can also make use of these payment mechanisms
if they can provide valuable and useful transactional services.
Moving the Gender
Bias
A woman is 14% less likely to own a phone than a man in low
/ middle income countries, yet the benefits of connecting women are huge
including, but not limited to, access to education, employment, security,
efficiency and more.
There are approximately 250 mobile health (mHealth) services
in Africa – more than the USA, Europe, Middle East and Asia. Many consumers are
willing to pay a premium for mHealth services, which means it is a good access
point for operators, but can also offer other organizations an opportunity to
reach an under-serviced demographic – women and mothers.
In Summary
The saying “African solutions for African problems” points
to the fact that only by understanding the real state of affairs on the ground
will the right solutions be found, and it is essential to develop and localize
for each, individual market. Sport, music, fashion, films, art – the same
things appeal the world over, but with a driving ambition, energy and hunger
you may not find elsewhere.
Africans are just as determined to export their talent as
they are to experience what the rest of the world has to offer, and engaging as
a brand should be a two-way conversation – we all have much to gain from that.
It is evident that African people have got the
necessary resources and knowledge to address the challenges the continent is
facing. Even if the concept needs further development and clarification in
terms of defining the problems of Africa and their solutions, “African
solutions for African problems” could be employed as a motto since it certainly
is inspiring. This applies especially to the youth of Africa who are in the
driving seat of Africa’s destiny.
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