New Dynamic Retail Markets Await in Africa - Global Trade Magazine
  October 23rd, 2015 | Written by

New Dynamic Retail Markets Await in Africa

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  • Africa’s mature markets – Botswana, Namibia, and South Africa – remain solid points of entry for retailers.
  • Success in Africa for retailers “requires analysis, understanding, and the flexibility to customize.”
  • For those retailers willing to take the plunge in Africa, “the rewards are plentiful.”

Promising new markets for global retailers exist in many nations throughout Africa – not just oft-discussed markets like Nigeria and Ghana, but also small, dynamic markets such as Gabon and Angola.

According to A.T. Kearney’s 2015 African Retail Development Index (ARDI), sub-Saharan Africa “provides retailers with diverse options,” advising retailers “with a basic offering to target the large cities and countries because scale will be important, while retailers with a wider offering should target emerging markets.”

“It might be most instructive to think of Africa as a set of opportunities that can be augmented and added onto one another, rather than just one singular opportunity,” said Bart Van Dijk, leader of A.T. Kearney’s consumer industries and retail practice in Africa.

The ARDI’s top 15 highlight some interesting developments based on an analysis of market size, market saturation, country risk and time pressure, ranking the potential and urgency of moving into each country accordingly.

Two small countries—Gabon and Botswana—are ranked first and second, while Ethiopia, with Africa’s second largest population, barely cracks the top 15. South Africa, the continent’s most saturated market, takes a strong position even among less developed markets with much less competition.

“If scale is not your biggest worry, Africa’s mature markets – Botswana, Namibia, and South Africa, for example – remain solid points of entry, with established shopping cultures, relatively high wealth levels, and well-established infrastructure,” said Mirko Warschun, leader of the consultancy’s consumer industries and retail practice for Europe, Middle East, and Africa. In these markets, “it is important to bring a differentiated retail concept.”

Success in Africa, concluded said Mike Moriarty, leader of A.T. Kearney’s Global Consumer Institute, “requires analysis, understanding, and the flexibility to customize, but for those willing to take the risk, the rewards are plentiful.”