Ndirangu wa Maina, group managing director of Consumer Insight Ltd

TradeInvestAfrica has been keeping an eye on the growth of the formal retail sector in East Africa and Karen Kühlcke took the opportunity to pose some quick questions to Ndirangu wa Maina, group managing director of Consumer Insight Ltd, a prominent market research company in the region. Consumer Insight frequently surveys African consumers on behalf of its FMCG clients.

Are there significant regional differences in shopping patterns?
Yes, there are differences.  The results shown on the table below refer to spontaneous responses to “social places visited” and the figures represents those who said they visit shopping malls, in a Consumer Insight’s Maisha study conducted in 2008.

COUNTRY	% VISITING SHOPPING MALLS
Kenya	17%
Zambia	27%
Madagascar	3%
Nigeria	13%
Somaliland	16%
Uganda	44%
Angola	37%
Ethiopia	29%
Burundi	35%
Rwanda	32%
Tanzania	31%

As you can see Ugandans at 44% visit shopping malls more than the other respondents in the 11 countries in the study.  Ironically, Kenya, which has more shopping malls than most of the other countries in the study, registered only 17%.  Perhaps, the fewer the malls, the more attractive they become.

Are consumers in East Africa a) brand conscious and b) loyal to particular brands?

Yes, East Africans are both brand conscious and loyal. However, brand loyalty is tenuous because of poverty.  A brand may be well known and liked but suffer low market share due to unaffordability. This is why in some product categories, e.g. alcoholic beverages, foodstuff and clothes - lesser known or unbranded products control huge market share. 

Are local goods favoured over imported goods or do international products enjoy a higher status?

It depends.  Where local brands e.g. beverages, financial services, food have established themselves, they are preferred to imported brands. In other areas, for example, cosmetics, international brands perform well.  The local vs international brand debate is however increasingly becoming moot.  It is a rarely a major factor in brand selection in many product categories. Indeed, many successful international brands are deemed local.

Is convenience food (pre-cooked or pre-prepared meals) becoming more popular?

No, it is not.  Convenience food is rare, and where available, expensive.  A lot of Africans still have strong connections to rural areas, where agricultural activity is based and hence can access fresh food at lower cost. Also, in most cases, labour to prepare food is readily [available] and affordable, if not free.

Nakumatt has opened a couple of 24 hour supermarkets in the region. Is this an indication of changing shopping patterns or rather of changing employment patterns with more people working shifts?

Neither. This is an experiment by Nakumatt to make shopping more accessible by expanding open[ing] hours.  Nevertheless, in the period 2003 to 2007 all the East African countries experienced significant economic growth, which may indicate busier working environments and increased night shifts.

Do you think consumers in the region are becoming increasingly environmentally conscious/concerned about sustainability issues? For example, are consumers likely to question excessive packaging, would they be prepared to pay a bit more for organic produce?

This is still an issue concerning the elite. Most consumers are too busy trying to survive to care.  In Rwanda, where plastic bags have been banned, shopkeepers still keep them “under the counter”.

A number of the “foreign” retailers who have opened up stores in African countries have been criticised for the low level of locally-supplied goods on the shelves. Do you think this criticism comes mainly from small-scale storekeepers who may lose business or from consumers demanding to see more locally manufactured or grown goods?

This criticism is from most people, particularly shoppers, not only small-scale shopkeepers.  Most people feel the foreign operators are not sensitive enough to local needs.  The foreign operators may have a limited choice of good quality products, but they often fail to demonstrate willingness to accommodate local products. 

Has online shopping taken off in the region?

No.  Internet penetration is still very low at 5%.  This is expected to change with the introduction of fibre-optic connections.

Is increased access to credit affecting shopping patterns?

Yes, people are now able to acquire some durables that were almost inaccessible in the past.  A lot of personal unsecured loans are for home improvement, which includes purchase of furniture and white goods.

Would you describe a typical East African consumer (if in fact there is such a thing) as demanding in terms of expectations regarding quality and service or are the retailers and suppliers clearly in the dominant position?

Given that most African markets have few, if any, import restrictions, the range of available brands, including cheap options from China and second-hand goods, has widened - thereby handing over immense power to consumers.  However, affordability is important. Consumers will sometimes knowingly settle for lower-quality products due to cost considerations.

What advice would you offer a “foreign” manufacturer or retailer planning to sell goods in the region for the first time?   

• First, take time to study the market.
• Second, customise the offering to the local market, not just whole importation of what has been successful elsewhere.
• Third, collaborate with local businesspeople.

Are there any innovations (from retailers or significant FMCG suppliers) that you particularly admire?

• Moving to small pack sizes to improve affordability.
• Loyalty cards.
• 24-hour shopping