JOHANNESBURG – Africa has more millionaires than Russia, but for many wealthy Africans shopping for designer handbags or luxury watches still means travelling to New York or Europe.
Even as luxury goods companies have ventured into unconventional markets such as Mongolia, Africa has been seen as a source of inspiration for their designs rather than of big-spending customers.’Luxury goods companies have been extremely slow to invest in Africa compared to the mighty rush into China and the rest of the Far East,’ said Suzy Menkes, renowned fashion editor of the International Herald Tribune. ‘The investments are mostly in the north and south of the continent. The rest is mostly one large, blank consumer space.’Africa’s rapid growth, booming cities and an aspirational middle class, however, are prompting luxury brands to look at entering untapped markets across the continent, although the complexity of doing business and the difficulty of finding suitable sites for luxury stores means progress could be slow.Louis Vuitton, the world’s biggest luxury group, has stores in Johannesburg and Cape Town, but Francesco Trapani, chief executive of the jewellery and watches division at LVMH , said Africa was ‘still a very, very small market for us’. Development of the luxury market there is unlikely to take off with the speed seen in the Middle East even though the total investable wealth of high net worth individuals in Africa totalled US$1,1 trillion by 2011, according to Cap Gemini’s 2012 World Wealth Report. That compares with US$1,7 trillion for high-net worth consumers in the Middle East.’In general, the luxury industry [is] quite ignorant about the real dynamics of doing business in Africa,’ said Uche Okonkwo, executive director of the consultancy Luxe Corp, which works with brands such as Chanel, which is privately owned, and Dior, part of the LVMH group.’People just don’t understand Africa. It’s just too complex. They think it’s a country.’One company that is making inroads is Italian menswear brand Ermenegildo Zegna. It plans to open a store in Lagos, Nigeria’s commercial capital, adding to its outlets in Egypt and Morocco, although a spokeswoman said it has yet to set a date for the Lagos opening.’Somebody has to start,’ said Franca Sozzani, editor of Vogue Italia, which dedicated its May 2012 men’s issue to Africa. ‘Zegna started in China 20 years ago and everybody thought they were crazy.’The 102-year-old fashion house, whose made-to-measure suits have been worn by actors such as Tom Cruise and Robert de Niro, opened its first store in China in 1991 and has been an early entrant to other emerging markets.After Nigeria, Zegna plans to open a boutique in Luanda, Angola in 2013 and is looking at Kenya and other markets.Italian fashion house Gucci, owned by French group PPR, is also looking at entering Nigeria as well as Angola, a spokesman told Reuters, markets that are cash rich from oil. German fashion house Hugo Boss and jewellers Cartier, owned by Swiss group Richemont, are already active on the continent. – Nampa-Reuters
