Africa the new destination for luxury brands
Interest has grown in Africa’s frontier markets in the past few years and the region is set to become a key battleground for the luxury goods industry.
Although average household income in most of Africa is still lower than those in Western nations, the emergence of large African companies rooted largely in the energy sector has meant that there is an increasing strata of elite consumers with very high disposable incomes.
A glut of oil, gas and mineral discoveries has changed the continent’s fortunes for the better, giving rise to an elite of super wealthy individuals with expensive tastes in countries such as Nigeria, Angola, Ghana, Mozambique, South Africa and Kenya.
Africa’s prospects of a great economic future driven by the oil and other natural resources has given birth to the concept of a ‘Africa Rising’. Hand in hand with that has come an increasing consciousness of luxury brands and not just in South Africa, but across the continent where emerging economies have seen the growth of the luxury goods market.
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Growth in luxury brands in SA calls for specialised insurance
Global consultancy Bain has predicted a 20% to 30% growth in the luxury brands market in South Africa over the next five years indicating the increased buying power in the country. However, owners of luxury brand items may be at an increased risk of underinsurance or even be unable to replace the item with the same brand.
This is according to Christelle Fourie, Managing Director of MUA Insurance Acceptances, who says consumers pay a premium for the bespoke design of their luxury brand items and expect them to be properly replaced should something become damaged, lost or stolen. “However, many general insurance providers do not factor in the premium that is paid for designer brands into their claims settlement approach.”
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