Posts Tagged ‘consumer electronics’

Why the African Consumer Market is NOT the same as the African Middle Class

Consumer goods store, Kilgoris, Kenya (March 2012)

The biggest challenge faced by consumer facing companies looking at the African Consumer Market is the age old positioning of the “middle class” as the ideal target audience. This middle class is segmented by the same attributes as the original middle classes who formed the consumer markets of the developed world.

This is the outside of the same store. Its located in a town called Kilgoris, situated at the edge of densely populated Kisii in western Kenya, and the sparse land of the nomadic Maasai pastoralists.

When you consider the range, the variety, and the price of the products displayed for sale, and compare it to the small dusty town with just one modern building, you wouldn’t imagine that solar panels worth USD 200 or Sony Bravia flatscreen TVs would be selling like hotcakes. But they do.

No dealer in a heavily cash based consumer market such as upcountry Kenya would tie up his working capital in expensive consumer electronics if there wasn’t a demand for it that meant the products sold quickly enough to keep the cash flowing in. My assumptions were completely upturned by this shopkeeper’s insights – it was the Maasai making purchases after attending the weekly livestock market.

A maasai manyatta Source: https://bushsnobinafrica.wordpress.com/tag/maasai-mara-game-reserve/

They’d pack 6 foot long solar panels, flat screen TVs, and satellite dishes onto the tops of hired trucks and take them off to their thornbush and mud manyattas. Yet neither you nor I would classify them by any of the traditional marketing department’s attributes as being part of the “middle class” consumer segment.

On the other hand, they were undeniably part of the African consumer market, and as the shopkeeper informed us, they were not only willing to spend on their homes, regardless of what they looked like from the outside, they could afford the best that he had to offer. He showed us his entire stock of kitchen appliances, water filters, jugs, mugs, and even children’s toys and fake flowers from Dubai! It is dealers like this who know best what their customers want and they range as far away as Nairobi to obtain the products in demand.

But I wonder if the marketers and the analysts still seeking the middle class have a clue about this huge market invisible to their eyes? And, whether, they’re looking in the right places?

Hub and spoke model for new product introductions



Nairobi’s Central Business District – Luthuli Avenue is the heart of the electronics and consumer appliance trade for Kenya. Chinese businessmen can be seen mingling with Somali traders and wholesalers come from all over the country to see “what’s new”. I saw recently introduced solar powered refrigerators (just 60W) on display, direct from China but was not permitted to photograph.

New Product Introductions in Informal Markets


“What’s new?” I asked Peter who runs this mari mari shop in a makeshift market just yards from Nairobi’s famous Kibera, and he proudly showed off the various features of this television set cum DVD player that can run on a small battery if need be. Yours for just $100. Don’t miss the bright pink amplifier on display or the rest of the ‘shiny shiny’ that Peter brings from the wholesalers in the Central Business District.

China made goods flood the informal markets across rural Africa while mainstream media turns itself inside out wondering how they’re doing it, so easily, so cheaply and so well, even as global brands and well meaning social enterprises struggle to get their life changing products to market.

For a sure signal of the emerging global ‘middle class’ and their aspirations, just take a careful look at what entrepreneurs like Peter are stocking for sale. Unsold inventory is a luxury he cannot afford and will work to minimize risk when it comes to new products and innovation. The Chinese manufacturers know this so they offer good on commission to the wholesale shops, leaving stock on display and returning to visit weekly to collect cash and check up on what’s moving fast and what isn’t of interest to customers like Peter.

Warranties? Return policy? Customer service? That’s the tradeoff the informal economy makes in return for affordable luxuries.