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Brief Published: 16 Jul 2015

Winning in Africa

Coca-Cola in Cape Town, South Africa

Brand opportunities are on the rise in African economies, where there are some of fastest-growing consumer markets in the world, according to a report by global management consultancy McKinsey, published this month.

  • Money to Spend: By 2025, nearly 75% of the estimated 303 million African households will have discretionary income – a rise of 90 million in just a decade.
  • Millennial Earners: Some 53% of income earners in Africa are millennials (aged 16 to 34) – a group keenly aware of new products and eager to try new things.

  • Mobile Opportunity: In 2014, African mobile penetration reached almost 90%, expanding access to financial services such as money transfers and non-cash payments. Mobile payment platforms in Kenya handled over $2bn per month in 2013.

  • Challenges Remain: Infrastructure remains patchy. About a third of Africans live within two kilometres of a paved road. However, with mobile payments, expanding connectivity and continued trials of drone-deliveries, this may matter less in the near future.

McKinsey recommends several strategies to win in African markets:

  • Target High-Growth Cities: City-based strategies are a must, given rapid urbanisation. However, timing the market is also key: different product categories become desirable as the market develops.

  • Local Knowledge: Successful brands tailor even flagship products to local preferences. Brewing giant SABMiller created a beer specifically for one commercial city in Nigeria, while Procter & Gamble modified its Ariel washing powder to suit local preference for more lather.

  • Know the Geography: "Effective distribution is the single most important determinant of success in African consumer markets," the report found.

For more on the latest opportunities and insights in developing markets, see our reporting from Quartz: The Next Billion 2015.