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The rise of the African consumer

The single-largest business opportunity in Africa will be its rising consumer market. A McKinsey report, one of the first of its kind, offers a detailed profile of African consumers, including their demographics, behavior, and needs.



William Russo, a director at McKinsey, outlines findings of a new report, The rise of the African consumer.

Executive summary

Africa’s consumer-facing industries are expected to grow by $400 billion by 2020, representing the continent’s largest business opportunity.

But many companies don’t know how to translate this potential into action, due to a dearth of market research. But that is changing. In one of the first studies of its kind, McKinsey’s Africa Consumer Insights Center surveyed 13,000 consumers in ten African countries, with a focus on the largest cities. Five categories of consumption were covered: apparel, financial services, grocery, the Internet and telecommunications.

As consumers, Africans are similar to urban consumers anywhere else in the world: they are both brand and quality conscious, they seek out the latest trends but watch their budget, and they want a modern, attractive shopping environment.

But Africa is a complex, nuanced market of 53 countries and more than 2000 dialects. Consumers in the north have very different preferences and needs than those of the sub-Saharan countries.

The McKinsey study attempts to provide companies, whether new to the continent or expanding an existing footprint, with the insights they need to formulate a winning business model to reach this new consuming class. Here are some highlights:

  • Focus where it matters
    Cities offer the best opportunity: urban Africa is forecast to contribute nearly 40 percent of GDP growth. But companies may be wise to bypass high-profile megacities, such as Cairo, Johannesburg, and Lagos, for mid-tier cities, like Abidjan and Rabat, which are more accessible, have less competition, and offer better profit margins.
  • Develop locally relevant, quality products
    Companies can better tailor products to local markets if they understand what quality means for African customers and know their preferences, lifestyles, and daily needs.
  • Hit the right price point
    Since affordability is critical, companies may have to reengineer products to hit a specific price point. The necessary moves may include offering lower-cost versions, smaller sizes, or alternative payment models.
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