Informal retail options such as small independent stores, kiosks, and open-air markets, dominate the African landscape, even among the middle class.  Malls, shopping centers, and other formal retail options are limited to primarily a handful of urban areas across the continent. Low rates of formal retail combined with increasing urbanization means massive room for growth within Africa’s retail sector. A 2014 report from A.T. Kearney identifies Africa’s most attractive retail markets today and those that offer the most potential in the future.

A.T. Kearney measured 48 countries in Sub-Saharan Africa using major macroeconomic and retail-specific variables for each country to develop an African Retail Development Index (ARDI). Gabon and Nigeria are identified as having the most rapidly evolving retail dynamics and demographics. Many international retailers have already established themselves or are planning entry in these countries, as annual per-capital retail sales surpass $1,000. Brands should move quickly, establish their brand early, and secure a loyal customer base in these countries.

The most advanced retail sectors and highest presence of international retailers exists in Botswana, Namibia, and South Africa. Retail sales per capita in these countries average $2,500 per year. Retailers in these markets should start investing in higher quality branded and private-label products.

As disposable income rises, consumer spending power in the retail sector will continue to grow in Africa. Although it may be hard for companies to know where and how to make an entrance, making an immediate impact on the continent could lead to brand loyalty and unparalleled advantage in years to come. For a more advanced breakdown of the ARDI top 10 and their go-to-market approaches, read A.T. Kearney’s full report here.

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