GEN Z spending grosses $10bn in latest report

Africa's Generation Z is making waves in the consumer market, having recently surpassed the $10 billion spending mark, solidifying their position as the largest and richest generation to date. CNBC Africa had the opportunity to sit down with Wolfgang Fengler, Chief Executive Officer of World Data Lab, to delve deeper into the trends shaping this generation's spending habits and the implications for the Consumer Business Index. Fengler highlighted a significant global trend, emphasizing that Gen Z is the largest generation ever, having collectively reached a $2 billion spending threshold. Notably, Africa plays a pivotal role in this milestone, with Gen Z dominating demographically on the continent. These insights were unveiled in partnership with the Aspen Institute and other collaborators in Nairobi, underscoring the region's significance in this consumer landscape. One of the key revelations pertains to the financial resources of Gen Z consumers. While individually they may have fewer financial means compared to their parents or millennials, as a collective, they are the primary spending force. Fengler stressed the importance of businesses acknowledging and catering to this demographic, as failing to do so could lead to dire consequences. Gen Z has consistently held the top spot in aggregate spending for the past decade and is projected to maintain this position for the next 15 years. The impact of this seismic shift in consumer behavior raises questions about the existing consumer classes that have long dictated market dynamics. Fengler articulated the distinction between average Gen Z spending, which amounts to around $3.50 per day in countries like Kenya, versus the consumer class threshold of $12 per day. This demarcation delineates individuals who are transitioning into the middle class, characterized by increased purchasing power and discretionary spending on items such as motorcycles, cell phone plans, and dining out. In terms of growth prospects, Fengler shed light on the importance of city-level strategies in Africa, emphasizing the limited consumer class presence in rural areas. Cairo emerged as a standout city in terms of spending, surpassing other prominent cities like Lagos. Nairobi and Mombasa also garnered attention as rapid growth hubs, positioning East Africa as a promising region for Gen Z business ventures. Other cities such as Dar es Salaam, Cape Town, Johannesburg, Abidjan, and Luanda are part of a cohort driving significant Gen Z spending upwards of $10 billion annually. The evolving consumer landscape in Africa underscores the necessity for businesses to adapt and cater to the burgeoning Gen Z demographic. With their unparalleled spending power and influence, Gen Z is reshaping consumer behaviors and redefining market dynamics across the continent.