SA black middle class big but untapped

JOHANNESBURG – South Africa’s black middle class grew by 30 per cent last year and should continue to expand in the coming years as the government pursues its black economic empowerment programme, a study has shown.

However, the survey by the University of Cape Town and TNS Research says retailers have failed to tap fully into this group, which numbers 2,6 million or 12 per cent of the country’s black population, but holds more than half of its buying power. Spending power among the black middle class, also known as “Black Diamonds”, grew to 170 billion rand at the beginning of 2007 from 130 billion rand at the end of 2005.”Perhaps the most important figure here is that 12 per cent of South Africa’s black population account for 54 per cent of all black buying power,” said Professor John Simpson who conducted the study for UCT’s Unilever Institute.The report defined the black middle class as people who earn R7 000 a month and above, and those who earn less but have a tertiary education.But it found that the retail sector remained out of step with the fast-rising and affluent class, which has driven consumer spending in Africa’s largest economy in recent years.”The marketing messages are either targeted to people who are too poor or too wealthy and the black middle class does not identify with that,” TNS Research’s Neil Higgs told Reuters on Tuesday.A failure to tap into this market reflected cultural differences between the mostly-white marketers and black consumers 13 years after the end of apartheid segregation.”People who sell things or offer services have identified the Black Diamond market, but they are not really bringing out the right stuff,” one of the study’s 4 500 respondents said.The government’s black economic empowerment drive, designed to give blacks a greater stake in the economy, is often depicted as creating a small new class of black plutocrats but in fact is having a significant trickle-down effect, the researchers said.Higgs said marketers seeking to reach the black middle class should appeal to their cultural and community roots rather than emphasising the luxury-end consumption patterns of the country’s richest people.Nampa-ReutersSpending power among the black middle class, also known as “Black Diamonds”, grew to 170 billion rand at the beginning of 2007 from 130 billion rand at the end of 2005.”Perhaps the most important figure here is that 12 per cent of South Africa’s black population account for 54 per cent of all black buying power,” said Professor John Simpson who conducted the study for UCT’s Unilever Institute.The report defined the black middle class as people who earn R7 000 a month and above, and those who earn less but have a tertiary education.But it found that the retail sector remained out of step with the fast-rising and affluent class, which has driven consumer spending in Africa’s largest economy in recent years.”The marketing messages are either targeted to people who are too poor or too wealthy and the black middle class does not identify with that,” TNS Research’s Neil Higgs told Reuters on Tuesday.A failure to tap into this market reflected cultural differences between the mostly-white marketers and black consumers 13 years after the end of apartheid segregation.”People who sell things or offer services have identified the Black Diamond market, but they are not really bringing out the right stuff,” one of the study’s 4 500 respondents said.The government’s black economic empowerment drive, designed to give blacks a greater stake in the economy, is often depicted as creating a small new class of black plutocrats but in fact is having a significant trickle-down effect, the researchers said.Higgs said marketers seeking to reach the black middle class should appeal to their cultural and community roots rather than emphasising the luxury-end consumption patterns of the country’s richest people.Nampa-Reuters