Africa: Travel Retail’s overlooked opportunity?
Known for its breathtaking beauty, rich and varied cultural heritage and diverse landscape, Africa has a lot to offer and so much to be discovered. With such great potential for travel and tourism, it’s no wonder an anticipated 5% growth is predicted for the market over the next ten years..
November 2015 | Kathryn Martinez, Senior Account Manager, CiR Business Lounge
Yet the world’s second largest continent is rarely at the forefront of commercial consideration in the travel retail industry. Africa’s share of the travel retail and duty free market was 1.3% last year (down slightly from 1.4% in 2003), compared to focus region Asia Pacific with a share of 38.6% in 2014 (up sharply from 20.7% in 2003)*.
Joining the dots between opportunity and investment can be difficult with Africa’s well-publicised political, economic and social welfare issues. However, if you look beyond the setbacks, the African consumer is actively encouraging new advances and demanding change – which is not only favourable, but fundamental for the travel retail market.
Africa is a magnet for ‘leapfrogging technology’, whereby consumers are progressing straight to mobile devices rather than opting for fixed landline options**. Such digital innovations open up the world to the African consumer and allows them to connect with brands and businesses that were once unobtainable. Likewise, companies that once discounted Africa can engage directly with the target audience instantaneously.
Increased connectivity and access to information makes the desire to travel far more appealing – and, thanks to a growing middle-class***, affordable. Between 2000 and 2014, middle-class households tripled across 11 key African markets**, which has led to an increase in disposable income and the attractive prospect of attaining luxury goods and services. Such a demand drives the need for businesses and retailers to cater for consumer requirements, as well as give tourists to the continent a choice that they have already come to expect.
This is evident in South African Airways’ online store that aims to boost spend through pre-ordering duty free before flying. The company is uniting a wide mix of passengers travelling in Africa by fuelling their common aspiration to shop in attractive, modern retail environments** and to purchase quality, internationally-recognised brands.
As the African consumer travels to new places and becomes more informed, associated and involved with the global marketplace, they are inclined to instigate change***. The activism mindset permeates the continent as its citizens aim for a brighter future.
The World Travel & Tourism Council (WTTC) has advised African nations to invest in its tourism infrastructure, move towards a fairer open skies policy, allow common visas across multiple countries and to empower its workforce**. As Africa’s travel industry is set to influence one of the fastest-growing economies, the best travel retailers will develop their offering in the region for commercial gain and for the benefit of the African and non-African shopper.
After all, travellers will continue to visit the continent – and African citizens will begin travelling more and more – so strengthening the African market and fulfilling the forecasted growth is set to be one of travel retail’s most rewarding challenges of recent times.
If unspecified: CiR database