MARKETING INFORMATION
The Bottom Is
Still Heavy
By Isaac T. Ngatia
T
he Africa consumer market has
been abuzz with the rising of
the middle class. The narrative
has pushed the marketing
fraternity to work tirelessly to not only
engage but also maintain this emerging
class with goodies and consumption
aspects.
Many economies around the continent are
working hard to not only achieve higher
growth, meet their development goals,
but also improve the lives of the citizens.
Such improvements include the quality of
living, consumption and overall wellbeing.
However, the bottom is still heavy! This is
mainly due to low momentum in lifting
the low end to the mid; still a relatively
large rural population and overall low
sustainable actions to ensure the group
that moves to the mid-level does not slip
to the low end.
There is little consumption data across the
continent. Hence, much of the debate is
based on inference and trends from various
sectors across the continent. Therefore,
it is about joining the dots. Looking at
different sectors in isolation as well as in
aggregation. Are the consumers across the
continent rising as the continent rises?
The last 10 years have seen the rise of
an increasing number of channels to
reach consumers e.g. supermarkets and
development of a formal retail sector.
South Africa is a clear leader in formal
retail sector. It has a well-developed
retail sector, with the strong supporting
factors such as availability of large and
well-structured retail spaces, logistics and
relatively higher income levels.
Estimates show about 60% of the retail
sector in South Africa is formalized. This
is the most formalized retail market within
the continent. As incomes improve across
the continent, the sizes and varieties may
vary.
However, the small retail outlets/kiosks/
grocery stores are still a predominant
channel to reach the bottom consumers
Technology, mainly access to mobile phone
and use of internet, will continue to play a piv-
otal role in bridging the gap between the bot-
tom and low-mid level. In the meantime, the
bottom remains heavy.
72 MAL21/17 ISSUE
due to their convenience in providing
affordable stock units. Furthermore, the
role of these outlets is evolving in line
with changes in the market. In addition
to consumer goods, some of these outlets
are taking up areas such as agency services
either in banking sector or mobile money
services.
Affordability and availability of products
within a given location are the factors that
are keeping these outlets on the move.
Most of the operators of these outlets
know their customers, since they operate
and live amongst each other within a given
location. This provides an opportunity for
customers to pick goods on credit and
pay after a given duration – at the end of
the day, end of the week or by end of the
month.
As incomes, habits and preferences change,
there has been a rise of the minimarts
and small supermarkets within the
neighbourhoods. Convenience in buying