Understanding demographics and culture critical to business success - CNBC Africa

Understanding demographics and culture critical to business success

East Africa

by Trust Matsilele 0

African retail sector space on the rise in East Africa. PHOTO: Whatsupibadan/africanplan

“Investors need to know population size, demographics of the place to ensure there are enough people to sustain a shopping centre, economic growth prospects and investment policies,” Dexter Mahachi an analyst at Imara Securities told CNBC Africa.

(READ MORE: Africa's retail market in the global spotlight)

Mahachi added that Africa is seen as an attractive investment destination due to recent developments and urbanisation trends.

“What tend to drive a move towards shopping centres in most of Africa is because the continent is the fastest urbanising region in the world,” “There is a lot of Africans investing in Africa such as Shoprite but there are few foreign firms coming from Europe and the United States,” added Mahachi.

“There are things you need to study when you are entering a new region and these include culture, people’s taste, demographics and income levels.”


Mahachi says, a lot of retailers fail to study prospective consumers’ preferred brands which he says affect product success.

(READ MORE: The race for Kenya's retail property market)

“I think Shoprite is doing well in some of the countries in Africa with successful example in Zambia, Umeme and Nakumatt in the East African region,” noted Mahachi.

Mahachi says Africa’s largest economy, Nigeria remains one of the most attractive retail destination in the region due to its economic policies.

He adds that East Africa has decent economic growth especially in countries such as Rwanda, Ethiopia, Tanzania, Uganda and Kenya.