“In essence, South Africa is an exciting space right now in Africa particularly. What’s happened over the last few years is that as other emerging markets have started to really take shape, luxury brands have started to look at new markets. Africa has really been a new frontier for luxury,” the Southern Africa Luxury Association’s Silvana Bottega told CNBC Africa on Wednesday.
“Roughly we’re looking at eight billion in the South African landscape in terms of luxury goods consumption, with an estimated growth of 20 to 30 per cent. The exciting things that are happening is there are a lot more international luxury brands looking at Africa, looking at investing, largely spurred on by the drinks sector and the alcohol sector.”
Motor cars can however be said to be the defining luxury statement, and luxury brands such as Aston Martin, BMW, Porsche and Mercedes-Benz already have deep roots in various parts of the continent.
“In an African context, we are still not considered first world economies. What luxury goods in Africa satisfy more than anything else is instant gratification, and it’s a moveable asset. From our point of view of Aston Martin we recognise our client’s as hard workers, innovators in their economies and largely these kind of vehicles are rewards more than anything else,” said Rens Rademeyer, general manager at Aston Martin South Africa.
“We’re dealing with the wants, not the needs, and when somebody wants a car like an Aston Martin, they’ve spent quite a bit of time researching their purchase and when they arrive at our doorstep it’s about delivering this luxury experience to them.”
This year the luxury car company will celebrate 100 years in the business, and links to iconic popular culture figures such as James Bond add to the car brand’s reputation of exclusivity and affluence.
“We’re seeing a lot more of the Guccis, Pradas looking seriously Africa. The Nigerian market is the hot topic right now. We’re having quite a slow growth in terms of South African new luxury brands coming to market,” Bottega explained.
“Recently Burberry opened in Johannesburg, they’re dealing in increments of one store at a time and really still testing the market. Africa’s really on the rise and we’re seeing a lot of interest due to dollar millionaires, and equally the growth of the willingness to consume luxury goods. Still there’s a big gap between where the luxury brands can actually come in because there aren’t enough retail spaces to allow for it.”
An accommodating environment is crucial for the establishment of a luxury goods franchises and stores, and one country’s positive reception to a luxury good in the region will not necessarily be the same in another country.
“It’s about sustainability. You don’t’ want to just happen on to something and go in there blind. We do a lot of research into the environment that we put the vehicles in and our brands in. We are looking at KZN, for instance, at the moment. But before we put the brands above the door there, we want to make sure that there is a market there,” said Rademeyer.