Title: Africa’s wealthy revel in luxury labels
February 2013. Queen Ahneva Adegeye is smiling. Valentine’s day is approaching, and orders are pouring into the Nigerian office of Quintessentially, the global luxury concierge service.
“We’ve had a lot of requests for Hermès bags,” says Mrs Adegeye, Quintessentially’s managing director in Lagos. “Men ordering them for their wives, and wives ordering for themselves.”
The bags, flown in from Europe, cost thousands of dollars each. But for the super-rich in Lagos, it is pocket change. More serious purchases will happen this month, when representatives of the luxury yacht company Sunseeker arrive to show off their new boats, which can cost millions of dollars. Mrs Adegeye is confident there will be buyers.
“The upper-middle class is booming, especially people working in the oil and gas sector,” she says. “They like to show off, buying big and entertaining big.”
Spending on luxury in sub-Saharan Africa is not confined to Nigeria, the continent’s biggest petroleum producer. Its nearest rival Angola has plenty of dollar millionaires who spend lavishly in boutiques in Portugal and Spain, according to Claudia D’Arpizio, a partner at Bain & Company, who heads its luxury goods practice.
The elite from Democratic Republic of Congo are also big spenders abroad. In newer oil and gas producers such as Mozambique, Tanzania, Ghana and Uganda, a class of super-wealthy individuals is also likely to emerge in the coming years.
In all of these countries, however, the rich must make most of their luxury purchases overseas, or at least order them from abroad. This is because the individual markets are still comparatively small, and retail space of the quality required by top brands is seldom available.
The only country with a developed luxury retail sector is South Africa, which has 71,000 millionaires, about 60 per cent of Africa’s total. Louis Vuitton and Burberry already have stores in Cape Town and Johannesburg. There is also local production of luxury goods, including leather products and jewellery.
As in other emerging markets, menswear brands are likely to lead the way. That is already happening in Nigeria, where Italian fashion house Ermenegildo Zegna plans to open a store this year, just up the road from a new Porsche dealership. It is also just a short walk from a huge billboard for Moët & Chandon champagne, a brand that needs no introduction in Nigeria.
The trend will continue, Euromonitor says. From 2011 to 2016, champagne consumption in Nigeria is expected to more than double. Only France will see a higher volume growth in champagne sales over that period.