South Africa’s Black Middle Class On the Rise

Black Middle Class South Africa
South Africa’s Black middle class is still a fraction of the population compared to its poor

AFRICANGLOBE – South Africa’s Black middle class has more than doubled over the last eight years, growing from 1.7-million South Africans in 2004 to an estimated 4.2-million in 2012, according to new research by the UCT Unilever Institute of Strategic Marketing.

The Unilever Institute’s latest study on South Africa’s Black middle class, dubbed “4 Million and Rising”, has found that the annual spend of the country’s Black middle class began pulling ahead of their White middle class counterparts in 2008, and has since skyrocketed to over R400-billion per annum.

“Despite setbacks caused by the recent recession, South Africa’s Black middle class continues to rapidly expand and is more influential and powerful than ever before,” Unilever Institute director John Simpson said in a statement on Sunday. “In contrast, the White middle class has remained fairly stagnant over same period, with its adult population growing from 2.8-million in 2004 to 3-million in 2012.”

‘Black Middle Class Crucial to the Economy’

Simpson, who led the “4 Million and Rising” study, said it was important for business and industry to better understand this market in order to facilitate the provision of goods and services to meet its needs.

“That this market continues to grow and prosper is crucial to the health and future of the economy. The Black middle class is helping create a vibrant and stable society by increasing South Africa’s skills base, deepening employment, and widening the tax net.

“As this market has matured, it has become much more complex than marketers and advertisers have assumed,” Simpson said. “Marketers are not adjusting fast enough to meet the needs of this rapidly transforming market segment.”

Simpson said that for marketers one of the most important changes in this market over the past decade related to connectivity. An estimated 95% of South Africa’s Black middle class now own mobile phones, compared to 64% in 2004. Correspondingly, the advent of smartphones and increased internet access has seen internet usage quadrupling over this period.

Changes in Consumer Behaviour

The institutes researchers found radical changes in consumer behaviour over the past eight years, due in part to the intervening global recession and the enduring economic downturn, which had made getting a job harder than it was five years ago.

“All these factors have led to a new financial conservatism, with respondents reporting that it is no longer ‘bling’ at all costs,” said Simpson.

In contrast to the institute’s study of the Black middle class in the early 2000s, which revealed rampant spending, the majority of participants in the latest study reported curbing their spending and only using credit when something was absolutely essential. Twenty-two percent of those surveyed admitted that they were struggling to manage their debt.

The recent study also showed significant changes in consumers’ relationship with brands. While respondents in 2000 reported that brands helped to define their identity, this has shifted, with most of those surveyed now viewing brands as extensions of their identity.

“This was the case across most product categories, except when it came to cars. For many in the Black middle class, cars still embody status and are perceived as shorthand for social standing,” Simpson said.

The full findings of the “4 Million and Rising” study will be released in early May.