The “New Normal” for Consumer Goods in Sub-Saharan Africa

January 2021

The COVID-19 pandemic has disrupted the consumer goods market in Sub-Saharan Africa, with recovery expected to take place over time. Consumers expenditure has been negatively affected, as value seeking consumers shift to essential products. The acceleration of e-commerce penetration is expected to continue over the long-term as shifts in consumer behaviour become part of the ‘New Normal’.

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Key Findings

Value for money reigns supreme as consumers go “back to basics”

Consumers have become increasingly mindful of their expenditure and are expected to persist in seeking value for money. Essential goods such as staple foods, basic cleaning materials and vitamins and dietary supplements will take priority as consumers mitigate the long-term economic impact of Coronavirus (COVID-19) as they continue to feel the pressure of reduced disposable income.

Omnichannel retail increasingly important as consumers adapt to new ways of shopping post-pandemic

The pandemic further fast-tracked existing strong e-commerce growth. It is expected to continue its strong growth trajectory, registering double-digit growth over the long term. Heavily supported by m-commerce in a region where mobile phones are the primary means of connected to the internet, the channel will be critical in any marketing mix. However, consumers will continue to buy from traditional channels such as open markets as they meet consumers’ need for value in countries such as Nigeria and Kenya.

Permanent shifts in occasion as consumption habits change

The shift in how and where especially professionals buy and consume goods, is likely to lead to a permanent change in consumption occasions. Many consumers are expected to continue to work from home, at least partially, leading to increased hometainment and less in-store consumption. However, this creates strategic opportunities across products and services.

Increased emphasis on local production and consumption

The increased emphasis on local consumption due to lockdown regulations is expected to continue post-pandemic. Consumers are in part driving the shift as they mindfully choose local over imported goods. Furthermore, government legislation aimed at reviving and local economic stimulus coupled with the increased cost of imported goods due to currency exchange volatility will also boost local production and consumption.

Introduction

Scope
Key findings
GDP growth heavily impacted while recovering over medium term
Disposable income to regain growth over medium term

Introduction: Consumer expenditure

Expenditure on ‘luxuries’ take back seat in favour of essentials

Retail Context

E-commerce gains as overall retailing market shrinks

Packaged Food

Impact on Packaged Food in South Africa
Impact on Packaged Food in Nigeria
Impact on Packaged Food in Kenya
Implications for Sub-Saharan African Packaged food players
Company reactions to the pandemic

Alcoholic Drinks

Impact on Alcoholic Drinks in South Africa
Impact on Alcoholic Drinks in Nigeria
Impact on Alcoholic Drinks in Kenya
Implications for Sub-Saharan African Alcoholic Drinks players
Kenya: order, deliver, drink

Tobacco

Impact on Tobacco in South Africa
Impact on Tobacco in Nigeria
Impact on Tobacco in Kenya
Implications for Sub-Saharan African Tobacco players
South Africa: illicit cigarettes trade booming due to sales ban

Beauty and Personal Care

Impact on Beauty and Personal Care in South Africa
Impact on Beauty and Personal Care in Nigeria
Impact on Beauty and Personal Care in Kenya
Implications for Sub-Saharan African Beauty and Personal Care players
Beauty consultation goes virtual

Home Care

Impact on Home Care in South Africa
Impact on Home Care in Nigeria
Impact on Home Care in Kenya
Implications for Sub-Saharan African Home Care players
Pwani Oil Kenya’s acquisition and pricing strategy boosts growth

Consumer Health

Impact on Consumer Health in South Africa
Impact on Consumer Health in Nigeria
Impact on Consumer Health in Kenya
Implications for Sub-Saharan African Consumer Health players
MyDawa : Kenya’s only e-pharmacy

Conclusion and Strategies to Consider

Key findings
How to adapt to the “New Normal” beyond COVID-19
Winning strategies to consider in Sub-Saharan Africa
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