By K. Lola Samuel

The company that introduced “cheap and chic” fashion to American consumers is planning to do so to African consumers.

Swedish company Hennes & Mauritz AB (H&M) said it has signed a contract for a store in the Mall of Africa in Johannesburg and plans to open its first flagship store in sub-Saharan Africa, South Africa in early 2015.

“We are very excited to announce the opening of an H&M store in South Africa. We see great potential for further expansion in this region. We look forward to bringing fashion and quality at the best price to the customers in South Africa,” said Karl-Johan Persson, Chief Executive Officer of H&M.

As far as further expansion in the region is concerned, the exact store locations have not been determined, said company spokesperson Kristina Stenvinkel. “We are looking at locations in both Cape Town and Johannesburg and it’s too early to say where the first store will be located,” she said.

H&M joins other global fashion and luxury retailers that have expanded their brands into the continent within the past decade, looking to tap into the rapidly growing African emerging middle class.

Earlier this year, luxury cosmetic company Estée Lauder Companies Inc. opened its first M.A.C. cosmetic brand flagship store in Lagos, Nigeria to meet the demands of consumers and serve the needs of the country’s film industry, Nollywood.

According to the International Monetary Fund, Africa’s GDP will grow at a higher rate than most developed economies.

While infrastructure remains a big problem for many African countries since it affects services, it hasn’t dampened consumers’ desires for premium luxury brands as these are seen as status symbols on the continent.

Driven by demand from higher-income earners looking for quality over price, the retail environments in South Africa, Kenya, Ghana, Nigeria and Senegal offer more opportunities to global retailers, investors and companies that are interested in selling to African middle-class consumers.

This is good news for global companies hungry for higher returns that see great potential for further expansion in this region.

Experts, however, advise that it is important for luxury-goods manufacturers and retailers to include in their planning when looking to move into the market the ability to tailor their products and marketing messages to the African consumers.

As an example, automotive manufacturers have to consider the roads and adjust their models accordingly to fit African roads. Porsche, which opened a showroom last year in Lagos, is a good example of luxury brands that are adjusting their brands to meet the needs of the African consumers.

Experts also point out that retailers should consider the tastes and needs of the consumers.

African consumers believe designer brands have the highest quality versus non-designer and would sooner cut back on the quantity rather than the quality of the brands they consume.

Unlike developed countries where megamalls and shopping centers can be seen in most cities, in Africa they are concentrated in urban cities and designed to target the middle class and wealthy consumers.

When looking at who actually consumes designer brands the most in Africa, Nigeria comes out on top. These consumers have sophisticated tastes, are well-traveled and often have traveled to cities such Dubai, London, Paris and New York to shop for luxury goods.

Although megamall developments have spurred up in some of the urban cities like Abuja, Kaduna, Port Harcourt and Lagos, Nigeria’s retail environment is mostly designed as a boutique-like shopping experience such as what one will see on Rodeo Drive in Beverly Hills, California and Paris, to target the wealthy consumers. Most still preferred a boutique shopping experience to that of a megamall.

In Africa, designer brands are more of a proclamation, a way for consumers to set themselves apart or feel that they have arrived as part of the new economy.


*This article was first published in September 2013

© 2016 THEAFRICABAZAAR magazine, a publication of Imek Media, LLC. All rights reserved.