Emerging technologies, a booming population, and rapidly developing economies are changing the retail landscape of Africa. Below, interesting facts and trends shaping the future of African retail.

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Demographics and UrbaniZation
Africa has the fastest rate of urbanization in the world. More than 40% of its population is currently living in urban centers. By 2030, Africa’s 18 largest cities will have a combined spending power of $1.3 trillion. Additionally, Africa has as many cities with one million inhabitants as North America.
Moreover, Africa is on track to become the continent with the world’s youngest population. Approximately 70% of Africans are presently under the age of 30. Youth account for around 20% of the population. Fifty three percent of African income earners are between 16 – 34 years old. This is an age group known for their awareness of and eagerness to consume new products.
The Rise of Retail
A growing population and larger cities translate into big opportunities for retail.
For instance, wholesale and retail are already the 3rd largest contributor to Nigeria’s GDP. Kenya has seen a 54% growth in its number of stores over the last 5 years. South Africa has almost 2,000 shopping malls covering over 24 million square meters. With a surge of investment in technology and infrastructure, Johannesburg is poised to become “Africa’s hippest city.” The newly revitalized neighborhood of Maboneng boasts trendy restaurants, luxury hotels, and galleries.
Growing Middle Class
The population of Africa is an estimated 1.3 billion, with 350 million considered middle class. A large proportion currently falls into the ages of 15 – 24. This age category spends more in consumer categories like entertainment, food, and technology.

Consumption in Africa is expected to continue increasing year over year. A Deloitte Consumer Review states, “At a time when many emerging economies are slowing, Africa is the second-fastest growing economic region behind Asia.”
The Rise of Brands
The emerging middle-class consumer is increasingly brand conscious. Consumer spending is still mostly concentrated in the informal sector of roadside stalls and town markets. However, in East Africa there is already a discernible shift from informal to formal retail.
As retail moves from informal to formal, companies like Walmart and The Carrefour Group are expanding their reach across the continent. Walmart bought a 51% stake in South African retailer Massmart Holdings Ltd. in 2010. Despite some setbacks and leadership changes, Walmart intends to expand the brand with 47 new stores over 3 years.
The world’s second largest retailer, The Carrefour Group, is also setting its sights on Africa. In 2018, Carrefour partnered with African e-commerce company Jumia to offer Carrefour-branded products on their e-commerce website.
While Africans tend to be loyal to local brands, this tendency is not as entrenched as it is in China and India whose retail sector is saturated by well-known local brands. Brand recognition is highly important to African consumers who often call products by an associated brand name, such as “Tide” for laundry soap. This gives international brands an opportunity to capitalize.
Loyalty Programs
Loyalty programs are key. Eighty20 completed a survey that found the average South African is a member of not one, but nine loyalty programs. With few African consumer behavior studies, loyalty programs have the added benefit of providing insights for informing retail product assortment, marketing, and daily operations.
The African Development Bank estimates there will be 2.1 trillion USD in consumer spending up for grabs by 2025. Services brands like food and beverage, telecom and banking should be paying attention.

A Spectacular Rise in Gross Domestic Product
Sub-Saharan Africa has several of the world’s fastest-growing economies. Ethiopia tops this list with an expected 8.5% growth rate for 2019. Since the start of the new millennium, sub-Saharan African nations’ GDP continues to grow at a rate faster than the global average.

“About half of the world’s fastest-growing economies will be located on the continent, with 20 economies expanding at an average rate of 5% or higher over the next five years, faster than the 3.6% rate for the global economy,” writes Brahima Coulibaly, director of Brookings’ Africa Growth Initiative.
The African Union began the operational phase of the African Continental Free Trade Area (AfCFTA) in July 2019. With 22 partners, the agreement has a combined market of 1.2+ billion people and a GDP of $2.5 trillion! AfCFTA has the potential to make Africa the largest free trade area in the world.
“Countries are realizing they need to trade more with others because of an expected increase in revenues and jobs creation, especially for the youth. Intra-African trade is expected to rise to 53.3%, meaning that revenues will increase.” – Vera Songwe, the Executive Secretary of the UN Economic Commission for Africa (ECA)

Infrastructure and Innovation
Traditionally lack of infrastructure has posed a serious challenge, from the lack of reliable shipping and transportation to banking institutions and technology. Africa’s entrepreneurs and retailers have come up with creative ways to “leapfrog” traditional western models of retail by leveraging e-commerce and online e-commerce platforms.
Jumia, headquartered in Nigeria, was the first African company to win the world retail awards in 2013. The e-commerce online marketplace connects local African companies directly with consumers, allowing them to pay for food, travel, flights and even real-estate through their secure payment platform. They offer 4 million subscribers access to over 6,000,000 products from 13 African countries and 50,000 national and international brands.

B2B mobile delivery network Sokowatch connects informal African retail stores with local and multinational suppliers like Proctor & Gamble. Small businesses can place an order via their mobile app or by SMS and have it delivered in approximately two hours.
“With both manufacturers and the small shops, we’re becoming the connective layer between them, where previously you had multiple layers of middle-men from distributors, sub-distributors, to wholesalers,” Sokowatch founder and CEO Daniel Yu told TechCrunch. “The cost of sourcing goods right now…we estimate we’re cutting that cost by about 20 percent [for] these shopkeepers.”
Infrastructure Development
However, infrastructure development is rapidly increasing. The Lapsset Corridor Program brings Kenya, Ethiopia and South Sudan together. There are plans for a new deep water port, pipeline, highways, and resort cities.
Google invested $47 billion over the last three years in technical infrastructure. Google is linking the western coast of Africa and Europe via the undersea Equiano cable. Phase 1 of the project connecting Portugal and South Africa is expected to be operational in 2021.

Facebook’s “Project Simba” is still in its planning stage. But, the vision is for an underwater cable encircling the continent with numerous landing points.
China continues to be a main driver of African infrastructure development. China constructs one in three projects and finances one in five. As tariff wars with the US continue, China’s African partners are likely to become even more important.
Mobile Technology
The GSMA association for mobile development noted that three-quarters of the population of Sub-Saharan Africa, or 747 million people, had a SIM connection in 2018. By 2022, Africa’s mobile economy is expected to generate $150 billion in economic value. Moreover, cell phones are central to life in Africa. 96% of web traffic comes from mobile so brands who want to engage with the African consumer need to remember that they are mobile first.
Two factors drive mobile use in Africa: infrastructure and population age. Where certain services are lacking, mobile phones take the place things like of landlines and atms. Additionally, youth are known for embracing technology, and with Africa’s young population, mobile use continues to grow.
African mobile users are very comfortable with apps. As Deloitte observes, “Consumers have embraced the ‘data exclusive’ world and while 63% do use text messages, South African mobile phone users prefer to communicate via instant messaging (82%) and social networks (74%) than through text messaging and voice calls.”
Another Deloitte survey reports one in five surveyed bought products or services with their mobile phone. According to Paypal and Ipsos, online spending in South Africa alone was expected to reach 53 billion in 2018. Consumers from Nigeria, South Africa, and Kenya counted towards almost half of Africa’s estimated 21 million online shoppers in 2017.

E-Commerce Growth
In the summer of 2019, 525 million users accessed the internet in Africa. Even with lower internet penetration rates, Africa boasts more internet users than Latin America and the Caribbean (447 million), North America (328 million), and the Middle East (174 million).
The result of continued growth of internet penetration across all African countries is influencing the emergence of new e-commerce platforms and online retailers. An article for IT News Africa, Adesh Kisten, Head of Sales at i-Pay noted;
“In African markets where credit is often treated with suspicion and cash is still king, low-cost banking providers tend to stay away from lending or credit facilities. Technology is seen as a way to keep the costs that traditional banks have to bear in check – resulting in millions of clients having access to online banking via smart devices but no way to shop online. Instant EFT solutions open the world of e-commerce up to those ‘uncarded’ millions, creating exciting new markets for merchants and consumers alike.”

What’s Next for Retail in Africa
Africa is the market to watch. Africa is filled with innovators. For example, tech startups increased by 40% between 2016 to 2018 and 22% of the working age population are establishing new businesses. Instead of lamenting poor infrastructure, African entrepreneurs are finding clever solutions to get things done. Thus, urbanization, a young and technology embracing population, and improving infrastructure all indicate that Africa is poised for growth and global influence.
Thank you for talking about how the african middle-class is increasingly brand conscious.
Thanks for sharing the information. Good work keeps it up. The fashion industry is growing and the latest fashion outfits are trending all over the world. Online shopping in Zambia is also increasing as people get more inclined towards the latest trendy fashion.
Thanks to sharing the information.
Brands are one of the biggest influence in public interactions
If creative branding can interact more with the people and less with it’s own interest …change will
Hi thannks for sharing this