Africa Is the New Market for Luxury Goods
SAN DIEGO ( MainStreet) A native Nigerian, Chris Folayan travels back to the country of his birth four to five time every year.
During recent visits, he's been increasingly surprised by the vivid and multiplying examples of luxury consumption.
"I saw one Rolls-Royce Phantom at the airport, and two more on my drive from the airport. Those are cars you don't generally see very much anywhere. To see three in one day ... it's just not very common," says Folayan, who has lived in the United States for about 15 years.
It's just one example of the rapidly growing market for luxury goods among Africans.
A sizable and ever expanding number of Africans can now afford luxury goods due largely to increasing disposable income and wealth generated from Africa's enormous natural resources, including oil, gas and precious minerals, say regional analysts and business owners engaging in more and more trade on the continent.
Disposable income, coupled with infrastructure that's rapidly improving and decreasing trade barriers, has by many accounts helped make Africa the next great market for luxury products.
Some analysts say U.S. luxury manufacturers would be foolish to ignore the emerging opportunities on the continent.
"When you talk about luxury goods and the African consumer, you're talking about a huge opportunity. It would be very disadvantageous for American businessmen and women to overlook that opportunity," says Ken Johnson of Devconia, a New York-based international business development management firm specializing in enhancing international trade, particularly in sub-Saharan Africa.
"Companies from China, India, Brazil are all there en masse. It's high time U.S. businesses take a closer look at Africa and take advantage of the opportunity," says Johnson, who was born in Sierra Leone and visits Africa at least once a year.
Africa is one of the fastest-growth regions in the world, poised to surpass Asia in terms of economic growth, by many accounts.
In particular, the economies of South Africa, Nigeria, Angola, Ghana and Ethiopia are growing at a brisk pace, says a report from T. Rowe Price , Five Countries to Watch .
South Africa is the leading economy on the continent, while countries such as Ghana have one of the fastest-growing economies in the world, according to the report.
What's more, the International Monetary Fund's World Economic Outlook released in October says 11 of the world's 20 fastest-growing economies are in Africa.
All of which has translated into a very visible consumption of luxury products.
"Desire for luxury goods is dramatically increasing, " Johnson says. "It varies country by country, but it's trending in areas of huge natural deposits and natural resources ... Nigeria, Ghana, with its gold."