A University of Cape Town (UCT) Unilever Institute of Strategic Marketing initiative, the African Lions research project, has established that the sub-Saharan African middle class, comprising around 100-million people, represents a R1.3-trillion a month market and is growing.
Carried out in collaboration with research specialists Ipsos, the project comprised desk research, qualitative research and quantitative research in ten major African cities, including Côte d’Ivoire’s Abidjan, Ghana’s Accra, Ethiopia’s Addis Ababa, Cameroon’s Douala, Tanzania’s Dar es Salaam, Nigeria’s Kano and Lagos, Kenya’s Nairobi, Angola’s Luanda and Zambia’s Lusaka.
“Information about the middle class population in sub-Saharan Africa has been scant and as the South African economy flatlines, many companies realise expanding further north is essential to growth,” said Ipsos African Lions team head Nanzala Mwaura, noting that the study contributed towards a better understanding of the consumer landscape on the continent.
UCT Unilever Institute of Strategic Marketing head Paul Egan added that the study was a “massive undertaking”, which took 18 months to complete. The study further involved 150 researchers, thousands of interviews and yielded over 300 videos and 5 000 photographs from across Africa.
“We’ve looked at the size, the segments and the varying definitions of the middle class within each city and have also come out with insights around an in-depth understanding of living conditions, livelihood strategies, aspirations, media consumption, buying patterns, brand relationships and much more,” continued Egan.
Despite the controversial nature of the term, the middle class is generally accepted to apply to those who are not in poverty and have disposable income.
With fast-growing populations, there is ever-growing competition for jobs. Unfortunately, job creation has not kept pace with urbanisation and population growth in most countries, resulting in only a third of the middle class having a full-time job. Thus, a key characteristic of middle class individuals across the continent is an entrepreneurial spirit.
This is often described as ‘the hustle’ – but in the sense of the verb rather than the noun.
Creative entrepreneurship manifests itself in terms of self-employment and business ownership, with setting up a business widely considered the best path for achieving one’s goals.
Most of the businesses are operating in the informal sector, which is still dominant across the sub-Saharan region. It is also common for members of the middle class to diversify income streams by setting up multiple businesses. Further, a relatively high proportion of people in full-time jobs are also running businesses on the side.
Supporting this dynamic is the mobile phone – 77% of the middle class own a smartphone and 83% are accessing the Internet through their smartphones. Forty-five per cent also access Facebook on a regular basis. The smartphone has become the tool of doing business and social media is an important way to promote small businesses and develop a network.
As mobile money becomes more and more ubiquitous, the cellphone is also becoming the platform on which to transact and manage finances. With more people also transacting and saving via their mobile devices, more and more people can develop a credit record.
“Although there is a lot of commonality, it is important to note that Africa is not a country, therefore it is important for marketers not assume that one size fits all,” said Egan.