Tuesday 8, September 2015

Dubai – MENA Herald: A.T. Kearney’s 2015 African Retail Development Index (ARDI) reconfirms the potential of many nations throughout Africa—not just oft-discussed markets like Nigeria and Ghana, but also small, dynamic markets such as Gabon, the ARDI’s top-ranked market and home to Sub-Saharan Africa’s highest GDP per capita, and mid-sized but fast-growing countries like third-ranked Angola.

The 2015 ARDI ranks the top 15 Africa countries according to market attractiveness for retail expansion.The ARDI is a useful frameworkfor retailers, because it not only identifies the markets in Africa most attractive for retail expansion today, but those that offer the most potential in the future.

Bart Van Dijk, A.T. Kearney partner and leader of the firm’s consumer industries and retail practice in Africa, noted: “It might be most instructive to think of Africa as a set of opportunities that can be augmented and added onto one another, rather than just one singular opportunity. How you pick among the opportunities depends on your offering. Retailers with a basic offering should target the large cities and countries because scale will be important, while retailers with a wider offering should target emerging markets.”
TheARDI is based on four dimensions: Market Size, Market Saturation, Country Risk and Time Pressure, and ranks the potential and urgency of moving into each country accordingly.

Shamail Siddiqi, Principal of the Consumer and Retail Practice, A.T. Kearney Middle East, commented: “Retailers in the Middle East are ideally situated to grow their footprint in Africa. Our region remains one of the most crucial springboards to entering the continent, which continues to demonstrate solid long-term prospects. The major challenge ahead for retailers will be navigating the specific complexities of the various African markets, which will require a balance between portfolio management and opportunity maximization.”

2015 ARDI Results (see chart)

The ARDI’s top 15 highlight some interesting developments. Two small countries—Gabon and Botswana—are ranked first and second, while Ethiopia, with Africa’s second largest population, barely cracks the top 15. South Africa, the most saturated market, takes a strong position even among less developed markets with much less competition. The ARDI report includes a summary of all 15 countries in the Index, recommendations for the Cash and Carry retail model, and commentary on the opportunity presented by the East African Community – Kenya, Tanzania, Uganda, and Rwanda.

The countries ranked in the Index fall into three main stages: Basic, Developing and Mature. The report also provides entry strategy recommendations for each stage.

Mike Moriarty, A.T. Kearney partner and leader of the firm’s Global Consumer Institute, concluded: “Success in Africa requires analysis, understanding, and the flexibility to customize, but for those willing to take the risk, the rewards are plentiful.”

The 2015 African Retail Development Index Ranking and Segmentation

Index RankCountryChange versus 2014Stage
6South Africa+1Mature
13Cote d’IvoireNRBasic