Executives who look at traditional media images of African poverty and conflict, and then turn away, are missing an unrivalled growth opportunity in what is tipped to become the world’s leading consumer market. “I think there is a lot of demand which is not served,” says Pierre-André Térisse, food giant Danone’s Executive Vice President for Africa.
For companies considering entry into Africa, opportunities are endless. A happy cocktail of demography, improving living standards and urbanization is set to serve up a growing pool of customers eager to access new products and experiences. Smart businesses are adding an African dimension to their portfolios.
“The biggest threat is not being here,” says Bryan Leith, Chief Operating Officer of KPMG’s Global Africa Practice. “The Chinese and, to almost the same extent, the Indians, are really capitalizing on the African opportunity. The rest of the world tend to be more risk-averse and are holding back, and if they continue to do so, they will find that all the low-hanging fruit has been picked,” says Leith.
Africa’s population is set to grow faster than any other place on earth, from around 1.2 billion people today to double that by 2050. At the same time, urbanization is expected to concentrate consumers with changing tastes and growing income in more readily accessed areas. By 2030, 50% of Africans are expected to live in urban areas, up from 36% in 2010.
“Those people are increasingly urbanizing, having more disposable income and so you have this emerging middle class that is moving out of the subsistence stage into the age of consumerism,” Leith says.