The Africans in the Diaspora has one of the most diverse demographic group in the black immigrant community, but, it is also one of the most complex and misunderstood consumer demographic in the Diaspora when it comes to financial matters.
THE AFRICA BAZAAR MAGAZINE
August/September 2015
As a top executive, or a business owner, one of your duties is to stay on top of trends and make sure your company stays in sync with current trends. You have heard the news and read the reports: Africa is the next big thing in business. You’re very excited about the prospects of securing a spot for your company on the continent, but what happens when the intense jockeying among businesses and investors to secure a spot in the African markets leaves you feeling like just another bull in a newly packed market? Time to pause, reflect and reform.
While most international companies, including traditional and alternative financial services such as banking, money transfer and microfinance institutions aggressively pursue the “unbanked/underbanked” consumers in African markets, -ironically-a potentially huge, more profitable and wealthier consumer segment of the markets – Africans in the Diaspora-is left largely untapped.
Africa has emerged as a top destination for international companies, and small-middle-enterprises looking to expand outside of the traditional Western, Asian or Latin-America and the Caribbean markets. However, as these companies compete for the same pool of customers in a rapidly growing market, most have never considered or believed they could serve the burgeoning Africans segment living in the Diaspora in a profitable way and as such, several have been too slow to focus on this market segment.
This overlooking is largely due to misguide consensus among companies, especially market research and advertising industries that too often consider this group demographically small and relatively insignificant players in comparison to their immigrant counterparts from Latin America and other continents.
Underscoring these perceptions are the old and common assumptions that the group doesn’t have enough money or that it is too risky. However, as recent reports from the International Monetary Fund and the World Bank have indicated, the African continent has some of the fastest growing economies in the world, forcing a change in the global economy.
With more Africans traveling and living outside of the continent and high investments pouring into the continent, experts says businesses and marketers will not only need to rethink their approaches to Africans living in the continent but the Africans in the Diaspora, which in the last decade has grown exponentially to become the new immigrant heartland and a major consumer segment.
According to a recent social trends report by research analyst Monica Anderson for Pew Research, African immigrants drive recent growth in foreign-born black immigrant population in America between 2000 and 2013, accounting for 36 percent of the total 1.4 million black immigrants that now live in the U.S., up from 24 percent in 2000 and just 7 percent in 1980.
A clear understanding of how people’s experiences, both on the continent and in the diaspora, and a common deeply rooted shared core values among this group comprising of family, community and faith can lead to better insights into the characteristics that shape their purchasing and financial decisions.
Among African immigrants, the two largest countries are Nigeria and Ethiopia, accounting for 226,000 and 191,000 respectively. Immigrants from Ghana, Kenya, Liberia, Somalia, Cameroon, Eritrea and Sudan rounding up the group. Yet, most major marketers and services outside of the continent are disconnected and do not pay attention to this group, which potentially could be one of the nation’s largest affluent black consumer segment.
The Africans in the Diaspora has one of the most diverse demographic group in the black immigrant community, but, it is also one of the most complex and misunderstood consumer demographic in the Diaspora when it comes to financial matters and many other products since very little information and data is known or collected about this group.
But that veil of mystery can be removed if companies, advertisers and market researchers segment the group demographically based on their place of origins, understand the cultural nuances and how these nuances affect and dictate their financial, health and purchasing decisions.
Why is having this information important?
Experts say for one, it not only will aid in the understanding of the dynamism of the group, but it will help in planning how to tailor products and services such as financial and marketing services, including wealth management, estate planning, life insurance, tax and legal services, and advertising.
Odd as it may sound, most of the high-net worth Africans are also investing in places like the United States, United Kingdom, Europe, Asia and Latin America, which experts say make them attractive targets for wealth management and insurance companies.
While this point seems straightforward and optimistic, peering into parameters such as country of origin and cultural nuances that define this diverse group to understand what makes each regional culture tick cannot be done in the typical methodology ways.
A clear understanding of how people’s experiences, both on the continent and in the diaspora, and a common deeply rooted shared core values among this group comprising of family, community and faith can lead to better insights into the characteristics that shape their purchasing and financial decisions.
The key here, experts say, is to understand the true needs of this diverse group- how can you help them to become more successful and then develop ways to serve them in a meaningful way.
For example, most individuals belonging to this group tend to be educated,- many of them hold advanced degrees, they are sophisticated, rich or upper middle class status, financial stable and family oriented.
They are also first or second generation trying to build wealth here for the next generation, which unlike previous generations that came to study in the Western world and then returned home, this group also known in the Diaspora as Afropolitans are looking to establish footprints outside of the continent as well as maintain their close ties to their place of origin, putting them in a unique financial decision earlier than some of their immigrant counterparts.
To understanding this group, you have to understand each of their story and what it means to them and break it into chapters.
A typical African story starts and revolves around family, home, love and society, in that sequence.
For most people in this group, attaining financial independence is the ultimate goal and once obtained, whether wealth swiftly made or carefully hoarded, it is often expressed in the most flamboyant ways, rather than subtle suggestions, of lives lived large. They want to show off their wealth and the using luxury items is one way to express their wealthy status, which can be counterintuitive in some case to obtaining financial independence early.
Financial services such as wealth management companies and insurance services can help put individuals and families in this group on long term financial path.
In addition, experts say through message customizations based of cultural nuances and a common shared value -family oriented, family is foremost, individual and family can stay focused on saving and investing, protecting and growing assets and ultimately reaching their financial independence.
For example, while Africans in general don’t fret over estate planning and inheritance since it’s a relatively new concept for most, they do however care about education, educating their child/ren and obtaining advanced degrees. For example, in order for a typical African immigrant to purchase a life (either short-term or long-term) insurance or estate planning services, the benefits that educational savings might have to an African who has young kids versus the one whose kids are grown will be key to syncing a common shared value and product services.
There’s also a clear divergence in financial decisions within this group. While most African immigrants tend to focus on building a family here, getting married and buying a home, Nigerians in the Diaspora tend to delay marriage and instead focus on obtaining advanced degrees or professions, getting a good paying job, buying a home and then getting married and starting a family.
Equivocally is the issue of remittance, which plays a big role in the financial decision of the Africans living in the diaspora.
With continued growth in population and socioeconomic status of Africans outside of the continent, while most companies are looking to expand to the continent, experts say some of these companies would have better chances and opportunities if they pay closer attention to the Africans in the Diaspora by distinguishing, addressing the cultural and demographic nuances, and tailoring products and services for this powerful consumer segment.
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