Walmart, KFC, and others fight over Africa’s new middle class
Photo: Danie van der MerweAfrica is being invaded by the likes of Walmart, KFC, Smirnoff, and Nestlé, says The Wall Street Journal [$ub. req]. Like a post-larvae butterfly, the glittery wing of a new middle class has caught the eye of international companies — and their pupils are turning into dollar signs. Africa’s middle class is now bigger than India’s (despite widespread poverty), thanks to “high commodity prices … better infrastructure, improved governance and the creation of jobs through private investment,” according to the WSJ. And by 2015, there will be 220 million new consumers in Africa. With the number of KFC outlets doubling and dueling cell phone companies (texts now only cost a penny), it’s only a matter of time before Hot Topic starts hawking angsty T-shirts to a whole new consumer base.
But it obviously varies by country: It’d be stupid to assume the continent is homogenous. “[W]hile poverty rates have fallen in the past decade, half the population still lives on only $1.25 a day,” says the WSJ in a related piece on Ethiopia [$ub. req]. For five years, Ethiopia’s economy grew twice as fast as Africa overall, but Zimbabwe’s economy halved over the past decade due to political turmoil.
Some say it’s mining, not shopping: Energy, not consumerism, is Africa’s best bet, according to Duncan Clarke, chair of an oil and gas investment advisory firm. WSJ says he and others believe “Africa’s most promising opportunities won’t be found in its new shopping malls but beneath its soil and sea beds, where big oil and global miners have long toiled.”
Hopes high for the Chinese consumer too: Similarly, The New York Times waxed optimistic about potential benefits of Chinese shopaholics: “A Chinese consumer society would improve the lives of hundreds of millions of people … For the rest of the world, the Chinese consumer is one of the best hopes for future economic growth.”
Raising an army of consumers on every continent sounds downright frightening, considering the amount of energy and resources that go into making our crap. On the other hand, ain’t really our place to deny developing countries what we in the first world already have. In any case, check out WSJ‘s related piece on the Kenya cell phone war, also part of its unfolding “Africa Rising” series. And keep watching — a future piece promises to address how dangerous public transit in Nigeria is driving commuter demand for used cars.