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Business Reporter
STANDARD Bank Group says the African consumer sectors offer attractive opportunities that require sound commercial navigation and balance-sheet backing for increased economic growth.

Standard Bank’s global consumer executive Brendan Grundlingh says that an understanding of the intricacies of the local consumer landscape was crucial for the viability of the continent’s business.

“From ‘farm to fork’, the entire consumer value chain offers exciting potential. Business practices and commercial climates may vary from region to region, but there’s one thing that rings true: Africa has millions of expectant consumers-in-waiting,” he said in a notice.

“Retailers, and businesses through the chain, which formulate competitive strategies and team up with the right local partners, are well positioned to benefit despite the current headwinds caused by the weak global market conditions.”

Grundlingh noted that geographic opportunity on the continent can be found across several markets through lifting the lid on some key statistics shows that indicate potential and growth of the consumer sector.

Multinational fast moving consumer goods companies are already taking the leap with organic growth in key African markets, he said.

Studies indicate the continent’s population would reach two billion by 2050, accounting for 24 percent of the world’s population, a significant jump from 15 percent in 2010.

According to the United Nations data, Grundlingh said, about 60 percent of Africa’s population will live in cities by 2050.

“McKinsey’s recent ‘Consumer Sector in 2030’ report anticipates that middle class spending globally will almost treble by 2030, and the ‘2014 Africa Annual’ report by Ornico Group expects consumer spending on the continent to rise to $1 trillion by 2020,” he said.

“Another important factor is that there are currently over 950 million mobile subscribers in Africa, according to telecommunications researcher Ovum.”

Grundlingh said this was a significant opportunity for retailers to harness by bringing their shop windows and value propositions into the digital world, which now includes rural-based consumers that were previously unreachable.

“Africa’s large youthful population, upward urban growth trajectory, socially-connected mobile users, untapped physical resources and the deepening of the financial sector are the key trends propelling the African economy into the future.

“But it’s important for businesses to look deeper, into the sectors themselves,” he said.

Grundlingh said consumer players often diversify their operations, providing infrastructure and employment, which stimulate middle class formation and have a far-reaching impact due to the multiplier effect.

He said the growth of the consumer sector in Africa was closely aligned to power and infrastructure development.

“Another important theme is that multinationals looking for new sources of growth will find an attractive and receptive market in Africa, where a large portion of disposable income is currently spent on primary and secondary food products and beverages, and where the demand for non-food commodities such as beauty products is expected to increase in the years ahead,” said Grundlingh.