A recent study by the University of Cape Town Unilever Institute of Strategic Marketing, titled African Lions, estimates there are over 100 million middle-class people in sub-Saharan Africa (excluding South Africa). With a combined spending power of US$400m per day, this group presents a sizeable opportunity for fast-moving consumer goods companies.
The UCT team defines the middle class as those who: 1) earn over $4 per day; 2) have disposable income; 3) are employed, run a business or are studying; 4) made it to secondary school; and 5) are not earning more than $70 per day. They interviewed a sample of 7,500 people living in 10 African cities – Abidjan (Côte d’Ivoire), Accra (Ghana), Lagos (Nigeria), Kano (Nigeria), Douala (Cameroon), Luanda (Angola), Lusaka (Zambia), Dar es Salaam (Tanzania), Nairobi (Kenya) and Addis Ababa (Ethiopia).
The African Lions report provides some ground rules for marketing to sub-Saharan Africa’s middle class. Here are the highlights.
Ground rule #1: Remember Africa is not a country
Africa consists of 54 diverse countries, each influenced by different cultures, religions and post-colonial ideologies.
It is therefore no wonder the economic outlook differs from country to country. Ethiopia’s GDP, for instance, is anticipated to grow by 8.9% in 2017, 8.6% in 2018, and 8.6% in 2019. However, Angola is only expected to see growth of 1.2% in 2017, 0.9% in 2018, and 0.9% in 2019.
Mindsets, attitudes and behaviours also vary. For example, people from the cities of Abidjan, Douala, and Luanda are seen as expressionists, while those in Kano, Addis Ababa and Dar es Salaam are more grounded and spiritual.
Ground rule #2: Keep it real
The continent already has a large, growing consumer class but many are under financial pressure and are ‘asset’ poor. However, the middle class’ lack of assets also provides a sales opportunity for marketers – only 36% have a fridge, 52% an electric kettle, 49% a computer, and 31% a car. The report suggests products be easy to store in small kitchens and bathrooms.
Ground rule #3: Help me become
Because of the middle class’ predisposition to entrepreneurship, brands should help people become their own boss. This can be done through brand activations or competitions which offer start-up capital, business tools (tablet or smartphones), accounting software, education, professional branding and business profiling as rewards.
It also helps if the products and services on offer meet the needs of middle-class entrepreneurs. Items such as mobile phones, airtime, training, transport, and cashless payment options are all in high demand.
Ground rule #4: Be available
“The worst thing is if you want to buy something and they tell you it is out of stock or it is just a hassle to find it,” noted a 24-year-old male respondent from Luanda.
Middle-class shoppers patronise both informal shops and modern supermarkets, requiring fast-moving consumer goods companies to embrace both these channels.
Although 68% frequent formal supermarkets at least a few times a month, small neighbourhood stores receive the most visits on a regular basis (i.e. more than twice a week). These are followed by counter-service stores, open-air markets and road-side table sellers.
Reasons for favouring informal channels include: lower prices, the traditional shopping experience, the ability to negotiate, the availability of particular fruits and vegetables, convenient locations, and flexible payment terms. However, when those surveyed to go to the mall, they do so because it’s more comfortable and safer. Some also go for the experience and would, for example, take selfies in Shoprite.
Ground rule #5: Embrace brand-hood
International brands are valued as they are perceived to “bring innovation” according to one respondent. Another remarked: “I want to experience what the rest of the world has already experienced.”
Some 71% of those surveyed said they buy branded products, while 45% noted they prefer branded products but mostly purchase unbranded goods. Only 39% have a preference for non-branded products.
Technology brands such as Samsung, LG, Tecno, Sony and Nokia are among the best-loved labels, although companies such as Coca-Cola and Adidas are also admired. Some 62% prefer to buy goods made in their own country, while 63% said they prefer to buy African brands whenever possible.
There is pressure on international brands to not impose economic imperialism, but to embrace local cultures, trends and tastes. Sixty-seven per cent of the respondents believe foreign labels need to adapt to the local market to show their commitment to society.
There are six core expectations a brand should meet to win over the middle-class consumer. One, it must be good quality; two, it should be affordable; three, it needs to have its own heritage; four, it has to be popular and well-known; five, there must variety such as different pack sizes; and six, it must be accessible and available, i.e. in stock and easy to find.
Marketers also need to ensure their products are correctly priced. Consider smaller units at ‘magic’ price points that match the coinage of the country, or sell discounted bulk packs. A tiered portfolio with more basic options could help retain customers.
Ground rule #6: Make your brand stand out
Visibility can be challenging in crowded traditional trade environments. Marketers should therefore consider additional cues, like branded store signage, to indicate their product is in stock.
When it comes to packaging, 52% of respondents said quality packaging is the single biggest purchasing driver, and 71% indicated they take note of information on the product label.
Ramesh Sadhwani, the joint managing director of Ghanaian retail group Melcom, said shoppers “are now starting to look a bit more into the details and specifications, as opposed to merely picking the cheapest one”.
Pack sizes should also reflect the everyday realities of the middle-class consumers – 49% are paid monthly but 22% receive income on a daily basis; most use public transport (72%) or walk (61%) to get around.
Some African markets – such as Accra, Abidjan, Douala, Luanda, Lusaka, and Lagos – are more sophisticated in their requirements: 1) brands must in innovative; 2) have attractive packaging; 3) must be endorsed by celebrities; and 4) have unconventional marketing and advertising campaigns.
Ground rule #7: Deliver new experiences
Experiential marketing such as roadshows, school/university activations and parties can drive brand acceptance. “I want to experience what everyone else in the world has been enjoying,” said a respondent in Abidjan.
Ground rule #8: Respect tradition
Culture still impacts buying behaviour – family support networks, church and savings groups are a focal point for many consumers.
Seventy-four per cent of respondents said that despite a focus on the future, their traditional culture should be respected.
Ground rule #9: Keep healthy
A good example of a brand playing to the middle class’ want of a healthy lifestyle was Colgate’s Oral Health Month Smilefie campaign. It offered Kenyans free dental check-ups throughout the country. In addition, people could win cash prizes by 1) getting a free dental check-up; 2) taking a selfie with the #ColgateSmilefie frame provided at the activation; and 3) uploading it to Colgate Kenya Facebook page with the hashtag #ColgateSmilefie.
Ground rule #10: Acknowledge ups and downs
Marketers should acknowledge the variability and uncertainty that are a part of middle-class life. Seventy-one per cent of the respondents reported that their incomes vary from month to month.
Smart brands cater to different consumer budgets and needs. For instance, in many markets Unilever offers both Sunlight and Omo washing powders – the one being more expensive than the other.
Ground rule #11: Learn the lingo
Urban youth culture is becoming increasingly defined by informal languages, such as Nouchi in Abidjan, Camfranglais in Yaoundé and Douala, Indoubil in Kinshasa-Brazzaville, Sheng in Kenya, and Town Bemba in Zambia. These diverse languages can be used in advertising campaigns to connect with a younger market and to bridge gaps created by ethnic, racial and religious groups.
Ground rule #12: Leap frog with e-commerce
According to Deloitte, Africa’s e-commerce market is expected to be worth $50bn by 2018, compared to the $8bn in 2013. However, the industry is still in its infancy, with 69% of respondents indicating they have never purchased anything online.
Despite this, the report’s authors note that Africa has the potential to leapfrog from informal trade to online shopping. Some 47% of respondents indicated that they access the internet every day, primarily via smartphones (83%).
Sacha Poignonnec, the CEO of online retailer Jumia Group, is quoted in the African Lions report saying: “In the US, e-commerce is slowly changing centuries of old shopping habits. Here it is creating the habits. People are making their first big buys, like smartphones, and first online purchases simultaneously.”
Ground rule #13: Be media savvy
Radio is by far the most widely-consumed media among those surveyed, followed by free-to-air TV, Facebook, daily print newspapers, and pay TV. Radio (51%) was also cited as the most influential medium driving purchasing decisions, followed by word of mouth (41%), local TV (37%), international TV (36%), newspapers (34%), recommendations from shopkeepers (30%), and recommendations on social media (26%).