VENTURES AFRICA – Global commercial real estate developers are currently dashing to construct shopping centres in Africa, one of the fastest-rising consumer markets in the world.
According to Reuters, when Wal-Mart Stores, the world’s biggest general retailer, acquired a major stake in South Africa’s food and grocery firm, Massmart, US shopping centre builder, Irwin Barkan, celebrated.
Barkan, who has been a mall developer for over three decades, believes the home market (US) is not producing sound business anymore.
But underdeveloped African cities proffered great revenues because of the ever increasing middle class.
“When Wal-Mart announced it was buying 51 percent of Massmart, I knew that if I was going to stay in business, Africa was where I had to go,” Barkan told Reuters.
Over 60 percent of sub-Saharan Africa’s bullish economic growth is attributable to the region’s consumer spending, according to World Bank.
The bank believes that in the next 36 months, the region’s economy will grow by more than 5 percent, beating the global average.
Reuters quoted consulting company McKinsey as estimating that Africa’s buying strength will be about $1.4 trillion in 2020. In 2008 it was $860 billion.
Many shoppers in Accra, Ghana and Addis Ababa, Ethiopia prefer to spend time at the countries’ traditional markets.
However, according to a Reuters report, these tendencies are being altered.
At Nigeria’s Shoprite Mall on Lagos’ Victoria Island, high street clothes are found in elegant air-conditioned boutiques. According to Whitey Basson, Shoprite CEO, the food retailer plans to build more shops in Nigeria.
The South African food retailer is now targeting Africa’s fastest-growing economies including Nigeria, Zambia, Uganda and Angola.
Shoprite currently has seven shops in Nigeria, Africa’s most populous country and these shops reportedly sold more Moët & Chandon champagne than in South Africa in the 12 months to March this year.
Nigeria’s This Day Newspaper has reported that the thirst for champagne by wealthy Nigerians has increased demand for the drink exponentially in that country.
According to This Day, Nigeria has become one of the world’s largest customers of the fizzy drink.
It is understood that almost all shops in the country’s cities, including Abuja and Lagos, sell lots of champagne, with Moët & Chandon being the most liked brand.
“Champagne consumption in Nigeria will reach 1.1 million litres by 2017, with 2011 consumption at almost N8 billion (£31m),” This Day reported recently, citing latest numbers from the Euromonitor International survey.
“The report showed oil wealth, hip-hop, movie stars and an elite obsessed with status symbols as demand drivers.”