As wealth gets more evenly distributed across the world, Africa is following in China’s footsteps as a major source of luxury spending power.
Nigerian tourists became the fifth biggest spenders in London in 2014 with a 50 percent increase in spending compared to 2013.
Staff with a grasp of Yoruba are in high demand.
The continued growth will put pressure on retailers in London and other markets to adapt to the needs of relatively new African consumers.
Nigerians buy on average four times more than U.K. shoppers, PropertyMagazine reports.
It is no longer enough to have Mandarin-speaking staff, according to the CBRE Luxury Retail 2015 report. Those with a grasp of Yoruba are also in high demand.
It is also not about making specific purchases, says PropertyMagazine. Consumers want to engage with the authentic brand experience that makes them feel more valued.
Retail space in Lagos is limited and high real estate costs on top of high import duties are slowing growth, LuxuryDaily reports. With its population of 13 million, the Lagos urban area is bigger than Paris with 15,500 people per square kilometer — more than double that of Shanghai. Most malls cater to mid-low income consumers, leaving luxury brands entering the market to opt for emerging high streets.
In Lagos, younger consumers have shown increased willingness to spend on luxury goods. More luxury malls will provide a medium-term solution, but until then brands should localize touch points and prepare for tourists, says LuxuryDaily.
Sub-Saharan Africa has emerged as the “next big thing” as the BRICS countries (Brazil, Russia, India, China, South Africa) become increasingly developed, according to a September report by A.T. Kearney.
A young, connected and fast-growing middle class — many still discovering their next favorite brands — will likely drive growth in sub-Sahara over the next few decades.
A.T. Kearney’s “Retail in Africa: Still the Next Big Thing” report, part of the “2015 African Retail Development Index,” looks closely at these consumers and the economies of their home countries to determine the opportunity for retail marketers as a shopping culture emerges.
As wealth gets more evenly distributed across the world, Africa is following in china’s footsteps as a major source of luxury spending power, PropertyMagazine reports.
Africa’s embryonic luxury markets are interesting largely due to the rise of disposable income and broadening yunger consumer base willing to spend more on luxury goods. Key cities in Africa will continue to remain on the radar of prominent luxury retailers planning entry or expansion in countries, despite impediments such as high import duties and stock quality.
The African Retail Development Index (ARDI) ranks Sub-Saharan African countries for potential and urgency to enter the country. Countries considered for rankings were preselected based on three criteria — a country risk of 35 or higher in the euro money country-risk score, population size greater than 1.5 million and a GDP per capita of more than $1,000, LuxuryDaily reported in September.
Gabon and Botswana ranked No. 1 and No. 2. Angola ranked No. 3, Nigeria No. 4, Tanzania No. 5, South Africa No. 6, Rwanda No. 7, Namibia No. 8, Ghana No. 9, Senegal No. 10, Gambia No. 11, Zambia No. 12, Cote d’Ivoire No. 13, Ethiopia No. 14 and Mozambique No. 15.
Source: Dana Sanchez, AFK Insider