Urbanization Drives Hunger For Luxury Goods In Africa
Sub-Saharan Africa is a promising market for luxury goods as urbanisation, economic development and increased affluence among the rising middle class drive growth across the sector.
The region is experiencing the second-fastest economic growth, after Asia-Pacific, and between 2008 and last year the luxury goods sector grew 35%, the Global Powers of Luxury Goods report by professional services firm Deloitte said on Wednesday.
Deloitte Africa leader for consumer business Rodger George said that urbanisation had led to more people becoming aspirational and having the money to back their aspirations.
Although significant risk remains in emerging markets, and growth is from a low base, the appetite for luxury goods in these markets is increasing.
“We expect luxury goods market growth in developed economies to pick up speed for the rest of this year. And for those emerging markets that have not accumulated too much debt, like much of sub-Saharan Africa, the long-term outlook is certainly positive,” Mr George said.
South Africa and Nigeria are regarded as the region’s emerging markets, and rising purchasing power has seen brands increasingly turn their attention to the continent.
Ermenegildo Zegna, purveyors of made-to-measure suits for Hollywood stars, opened a store in Lagos last year, and has three more planned. Hugo Boss also has an outlet in the city and Prada is expected to follow suit. Emporio Armani, Versace, Paul Smith, Jigsaw and Longchamp are due to open in South Africa in November.
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