Have you considered expanding your retail global trade operations into Africa? Well you should! By 2020, nearly half of all Africans will be living in cities, and consumer spending will grow to almost $1 trillion. Despite the challenges associated with entering Africa, this is a market retailers cannot afford to ignore.
Not sure where to start? The A.T. Kearney African Retail Development Index (ADRI) is a great first step. This study helps retailers determine where and how to best enter Africa’s retail market. This year’s top countries included Rwanda, Nigeria, Namibia, Tanzania, and Gabon.
It is important to remember that the top countries are diverse in terms of scale and growth potential. Based on market size, market saturation, country risk, and time pressure, the ARDI ranks the potential and urgency of moving into each country, recommending three different approaches:
- Start with the Basics (Rwanda, Tanzania, and Ethiopia) – markets with limited market saturation, but also low maturity. The largest opportunities revolve around basic consumer packaged goods at low prices.
- Move Quickly (Nigeria and Gabon) – markets with rapidly evolving retail dynamics. Enter these markets ASAP before the first movers establish their brands.
- Differentiate (Botswana, Namibia, and South Africa) – markets with the most advanced retail sectors. Deliver differentiated products that are hard to find and appeal to a growing middle class.
“There are wide differences in infrastructure and supply chain development across African countries. Understanding the opportunities and limitations from country to country is a critical element of the retail expansion decision,” said Bart van Dijk, A.T. Kearney partner and ARDI co-author.
For more information, please read this SupplyChainBrain article.
For more information on how to succeed when entering new retail markets, check out this Meeting the Challenges of Global Retailing eBook.
