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Africa's luxury goods markets emerge as a powerhouse
In the last two years, the global luxury consumer base has shrunk by around 50 million people. However, emerging markets like Africa are outperforming their international peers, with the continent projected to add millions of new luxury consumers by 2030.
Photo by Laura Chouette on Unsplash
As a result, the region is asserting itself as a critical player in the sector’s resurgence, enticing international brands eager to tap into its potential.
Booming economy accelerates luxury demand
This is according to Michael Zahariev, co-founder of Luxity, who says that Africa’s influence on the luxury industry will continue to expand in 2025.
“The continent’s consumers are gaining stronger purchasing power relative to other areas of the world, with the African Development Bank projecting a 4.1% real GDP growth rate - outpacing the International Monetary Fund’s forecast of 3.3% globally. A possible decrease in inflation, from 17.8% down to 13%, will provide further economic stability and boost buyer confidence.”
Despite rising disposable income, he points out that Africa’s luxury shoppers remain financially prudent, and are increasingly gravitating toward the pre-owned luxury market for high-value purchases.
“Our Q3 sales for 2024 grew 34.7% year-on-year, outstripping the global growth rate of 7%.”
“A key factor behind this trend is the heightened influence of social media on purchasing decisions. “Around 58% of African luxury consumers select products based on how they’ll appear in online photos, compared to just 44% globally,” notes Zahariev. “This influence is evident in instances such as a pre-owned Birkin bag selling for R500,000 in under 30 minutes.”
Luxury giants shift focus to Africa
He highlights that distinctive shopping habits, coupled with economic momentum, are turning this territory into an increasingly attractive destination for global brands.
“As once-dominant luxury markets like China experience a slowdown - prompting brands such as Louis Vuitton, Bottega Veneta, and Gucci to scale back their presence - Africa is stepping into the spotlight.”
“Rolex, for example, is opening its first mono-brand store in South Africa’s Diamond Walk at Sandton City later this year, with several other luxury brands expected to follow suit,” explains Zahariev.
“This is in contrast to the global market for mono-brand stores, which has declined by between 1% and 4%.”
He adds that Africa is defying the global trend of declining foot traffic in brick-and-mortar luxury stores.
“Cape Town is leading the charge, with a new luxury shopping wing under development at the V&A Waterfront to meet growing demand for designer labels in what is set to become Africa’s wealthiest city in the next five years.”
A market to watch
“With traditional luxury markets facing stagnation, Africa has become a critical market to watch. The continent’s affluent consumer base is growing, as is demand for luxury. Adapting to these changes will ensure brands remain at the forefront of the luxury sector’s evolution,” concludes Zahariev.
