Thanks to flourishing resources such as oil and gas — and a growing class of wealthy individuals — 2014 will be a great year for luxury goods in Africa. Business Day Live reported that several countries in Africa including Mozambique, Nigeria, Ghana and Kenya have continued to see a rise in luxury goods purchases.
As a result of more investment, within the next five years the luxury market is expected to expand by 33 percent. That expansion will compound the near 35 percent of growth which took place between 2008 and 2013, the report said.
“Although average disposable incomes are still lower than those in Westerns countries, large economic disparities and the emergence of large African companies has meant that there is an increasing elite of consumers with very high disposable incomes,” Izaskun Bengoechea, Euromonitor International research manager, told Business Day Live.
A financially prosperous district in Lagos, Nigeria, Victoria Island is home to expensive designer clothing stores and auto dealerships like Porsche. According to the report, alongside apparel and handbags; alcohol, motor investments and watches top the list of desired luxury items.
“Luxury sales are still very concentrated in South Africa and Morocco, but brands are starting to expand in new markets like Angola and Nigeria,” Claudia D’Arpizio, Bain Worldwide partner added.
She also noted that big name luxury brands like Louis Vuitton, Burberry, Gucci, Fendi and Cartier already have stores in Africa while newcomers like Prada have plans to create a presence in the near future.
South Africa has one of the most stable luxury markets in Africa as 60 percent of the Africa’s millionaires live in the country, Business Day Live reported. Kevin Lings, chief economist at Stanlib added that purchases made by tourists contributed greatly to South Africa’s luxury goods sector growth.
“It may be hard to believe that a country where most of the people live on less than US$2 a day could be one of the fastest growing markets in the world for luxury goods, yet Nigeria, Africa’s most populous country, is just such a place where the pursuit of wealth has even become a religion,” Fflur Roberts, market research head at Euromonitor International said.