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Top three consumer trends to be aware of in sub-Saharan Africa
By our News Team | 2023
Providing cost-effective retail solutions and helping consumers to ‘live a little’ can pay big dividends, research company advises.
Research company Euromonitor International has identified three trends it believes are poised to shape the African continent, and says companies should leverage these to drive consumer sales. The trends are:
Informal markets offer smaller quantities of a product at lower price points. Photo by E. Stanley Ukeni via Wikimedia Commons
Budgeteers: Rising inflation sees consumer price-sensitivity
As consumers face higher prices amid rising inflation and increasing costs, a new consumer group, Budgeteers, is having a greater impact on the continent. With even tighter budgets, consumers are more careful on how they spend their money, developing diverse ways in which to stretch it.
One popular approach is to shop at informal markets, which are widespread on the continent and offer smaller quantities of a product at lower price points – for example, a cup of rice, a single tea bag, or a single cigarette.
Even at modern retailers, consumers are using a similar strategy – buying smaller pack sizes of discretionary items at an affordable price.
In addition to pack sizes, consumers are looking for multifunctional products to cut down on the number of products purchased. They also are buying less-expensive ‘substitute’ items for those goods that are now deemed too expensive.
“Retailers and brands need to find ways to address affordability, and pack size and promotions are a good way to start … particularly when Budgeteers are a driving consumer group,” a blog post written by Africa-based Senior Analyst, Anje du Plessis, says.
Eco Economic: Cost-effective solutions environmentally friendly by proxy
Eco Economic describes consumer behaviour where the most cost-effective options wind up being the most environmentally friendly too. In Africa, more than 20% of the population live below the international poverty line of less than USD3.10 per day.
As such, cost-effective choices tend to be sustainable by default. During times of hardship, consumers tend to gravitate to the familiarity and comfort of traditional dishes, which are often plant-based. These dishes are also more affordable, since ingredients are seasonal, local and readily available.
Equally, as consumers in the region also have a deep appreciation of their local traditions, brands should be mindful of this by paying more attention to traditional ingredients.
For example, a recent launch from Unilever shows how multinationals can innovate within a market while also honouring and celebrating local ingredients. Knorr Mitted Shiro, a stew powder made of chickpea powder and spices, was launched in Ethiopia in April 2023. Shiro stew, a meatless stew, typically consumed with injera (Ethiopian flatbread made with teff flour), makes an affordable meal and is ideal for consumers trying to cut down on overall costs.
Here and Now: Living a little, despite a constrained budget
While saving money remains a top priority for consumers, they still want to treat themselves whenever they can, particularly after a prolonged pandemic that limited spending.
This is where the Here and Now trend comes into play, as consumers seek instant gratification. However, as consumers are still wary about overstraining their budgets, companies need to balance consumer gratification with affordability.
Offering flexible payment solutions is one strategy. Brands. along with retailers, should offer consumers a way to purchase products without a big cash outlay.
For example, Payflex, available in South Africa, offer shoppers interest-free repayments over four instalments. Another strategy is to offer mini- or travel sizes of luxury or aspirational products, thus making it more accessible to budget-conscious consumers.
“By finding ways to balance the current economic climate with flexibility, opportunities still abound on the continent,” Euromonitor says.
You can read the full blog post here.
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