Africa

Details

  • Industry: Consumer Markets
  • Type: Business and industry issue
  • Date: 7/11/2014

Consumer Markets

KPMG's Consumer Markets team helps business to adapt to fast-changing business conditions.

White Goods in Africa 

Africa has a population of more than one billion people, presenting a massive potential consumer market. But most of the continent’s consumers are extremely poor, and spend the majority of their money on food and other necessities. As a result, the retail sector is relatively under-developed at present, with most shopping being done at traditional shops. In particular, the market for white goods in Africa – and in particular major kitchen appliances – is on aggregate still small and remains under-researched. Still, an increasing number of consumers are on the cusp of the US$1,000 annual income level, which will allow for the expansion of consumption beyond just the basics. Admittedly, climbing above a low income level (less than $1,000 p.a.) is still far from being able to afford luxury goods.
White Goods in Africa
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NKC estimates indicate that an annual income of more than $6,000 is needed before notable amounts of money can be spent on appliances such as washing machines and refrigerators. This implies that the ‘good news’ stories about the booming African consumer market does not translate into immediate massive potential for expanding the white goods market.

 

For these reasons, KPMG’s recent 2014 White Goods Africa sector report focuses on identifying the products that are popular to import, where appliances are produced for export, and the countries where large markets for white goods are established.

Some interesting facts coming out of the report include:

 

  • Refrigerators and freezers are by far the most popular kitchen appliances in Africa, both from an import and export perspective.
  • The biggest markets for white goods are South Africa, Egypt, Nigeria, Algeria, Morocco and Angola, representing 78% of kitchen appliance imports during 2012.
  • The main producers and exporters are South Africa, Egypt, Tunisia and Kenya with 95% of exports during 2012.
  • The continent’s imports of refrigerators & freezers; stoves, ovens, and grills; laundry and dish washing machines; and microwave ovens were valued at US$3 billion during 2012, while export revenues from these categories equalled US$330 million.
 

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