From Business Day Live
Africa’s scope for investment is steadily increasing and demand for more formal retail options from shoppers is following suit.
As the world’s second-fastest growing region, the continent’s booming economies have caught the eye of multinationals in search of higher yields. The region is topped only by emerging Asia.
The continent’s consumer-facing industries are expected to grow by $400bn by 2020, representing its single-largest business opportunity, according to a McKinsey report.
French multinational retailer Carrefour has partnered with distributor CFAO to open shops in eight African countries by 2015. It is the latest global giant to cast its net on the continent’s burgeoning middle-class following Walmart, Inditex’s Zara and Arcadia Group’s Topshop.
CFAO, which will own 55% of the venture with Carrefour, aims to generate about R13bn in revenue annually in 10 years from the link-up, and from revenue produced by the shopping malls it plans to construct. CFAO is controlled by Gucci-owner Kering. It distributes goods mainly in central and west Africa.
While urbanization and rising affluence are fueling a consumer boom on the continent with a rising middle class demanding high-quality brands and modern goods not previously available, the lack of infrastructure and formal trading platforms remain a challenge.
Read more at Business Day Live.