A recent Economist article highlighted the recent growth of local supermarket chains across the African continent. Today, a staggering 70% of Africans buy their consumer staples from local vendors. What is driving this specialized, locally-focused retail on the continent? Three primary trends have been working hard behind the scenes to power this quiet explosion.
High Mobile Penetration Driven by Favorable Demographic Trends
The African continent is home to the youngest and fastest growing population globally. It is a tapestry woven of diverse demographic, religious, and sociopolitical dynamics. Significantly, it is home to a growing consumer middle class. Analytics firm Fraym estimates that there are 330 million people in this category, and two-thirds were in just five countries: Egypt, Nigeria, South Africa, and Algeria.
Mobile connectivity is a key theme for the continent. In 2023 alone, there were 489 million unique subscribers recorded across Sub-Saharan Africa. Compared to peers in other regions, African consumers are more reliant on their phones for banking and financial transactions. This is reflected in the mobile money boom: in 2020, Africans exchanged more than $490 billion via this widespread platform.
Mobile’s dominance on the continent is even more impressive in light of the woefully inadequate infrastructure that frustrates more often than it functions. 3G remains the most dominant technology in the region, and 5G represents a mere 3% adoption rate. Furthermore, Sub-Saharan Africa is home to some of the world’s highest mobile data prices. In light of these headwinds, the growth of mobile adoption in the region is even more impressive.
This high level of mobile penetration, coupled with inadequate infrastructure, means that there is a large gap in the needs of consumers on the continent. Entrepreneurs and venture capital funds alike have taken notice of this opportunity, contributing to a boom in early stage investing with a primary…
Read the full article here
