“According to our latest data, sub-Saharan Africa is actually the second fastest-growing economy in the world. Within that, five of those countries are actually in the top 10 as far as fastest growing markets in the world,” Euromonitor’s head of luxury goods Fflur Roberts told CNBC Africa.
“Despite poverty and various other problems or conflicts within the region, the middle class is growing fast. Lots of these luxury brands are looking at Africa and the Middle East as a possible next frontier region.”
From a global perspective, there has been significant growth in the luxury goods market. Africa, as an emerging market, has also offered huge potential in this space.
“South Africa is the biggest luxury market in Africa and the Middle East, and Nigeria. Outside of those, we’re looking at Kenya – the recent incident in Nairobi may have caused some alarm for some luxury good brands but there is still a lot of potential there,” Roberts explained.
“Other markets – Ghana, due to the ease of doing business there, it is forecast to have a fast-growing middle class. Ethiopia is another market we’re looking at –that’s to do with wind and other reserves that they have there, and Tanzania thanks to forecasts that we see in growth in tourism and, again, a growing middle class.”
Roberts indicated that brands that have already moved into Africa are ensuring that they are well-prepared for the economic environment.
“Most of them have started by going through a wholesaler and have also done a lot of research about who their consumer is, and are really learning more about the infrastructure there before actually moving into the country, and setting up stand-alone stores,” she said.
“From the brands that we’ve seen, particularly into Nigeria, lots of them have obviously been very careful about moving into the country – it’s wholesaling or setting up really good relationships with local retailers, and distributers through licensing.”