Market insights on Ethiopia

A survey by Nielsen Marketing Insights has indicated great growth and increasing urbanisation amongst Ethiopians. Says the report: “The streets of Addis Ababa are bustling with the delicious smells of cooking breakfast, and the sounds of people.
As the centre of commerce and social interaction, the street is where much of life takes place. Only about 50% of those surveyed currently hold bank accounts, although most of the citizens are hopeful that with expanding globalization, more people will acquire bank accounts.”
Ethiopia follows Nigeria as the second most populous nation in Africa, with 83 million people, two major ethnic groups (Oromo and Amhara) that account for close to 60% of the population. The population growth rate is 2% annually. Although the majority of the population is rural, the World Bank:
Africa Development Indicators report has indicated that the urban population is growing twice as fast as the rural.
Young, university educated and relatively wealthy people in Ethiopia, account for roughly one-sixth of
respondents surveyed (17%) but control 28% of the income. Among those surveyed:
• The monthly household income is 4400 ETB (approx. R2560)
• There is a colour television in almost eight of 10 houses, but only one in three own a refrigerator
• 50% of the heads of households are employed in unskilled or semiskilled work
Consumer segments
Three major consumer segments account for close to 60% of Ethiopian survey respondents: Trendy aspirants, evolving juniors and balanced seniors:
• Trendy Aspirants.
15-29 years, single, largely male, middle SEC, urban
Affluent and willing to pay more for quality, they represent 17% of those surveyed and offer a very good
opportunity for launching or growing brands. Educated up to secondary school and above. Modern in terms of fashion, technology, and willingness to try new products.
• Evolving juniors
15-19 years, middle to lower SEC, peri–urban
Account for 25% of those surveyed and are predominantly students in peri–urban areas. This group likes spending time with friends.
Affordability and availability is the best way to reach them. They are also social and want to enjoy time with friends.
Traditional and family-oriented. Value affordability. Average consumption of TV, radio and mobiles.
• Balanced seniors
20-45 years, married with children, across all SEC16% of the surveyed are traditional,family–oriented and religious. They value affordability and are open to recommendation. Studied secondary school and above.
• Wannabe Bachelors
20-34 years, male, middle to low SEC, single, peri–urban.
They account for 13% of those surveyed. Educated up to secondary school. Mix of blue collar and supervisor level jobs. Influenced by good packaging and advertising.
• Struggling Traditional
30-45 years, married with children,lower SEC, peri-urban
They account for 12% of the population. Low levels of education – secondary school and below. Rooted
in family, traditions and religion. Prime concerns are affordability and availability. Not brand conscious.
• Progressive Affluent
30-45 years, married with children, higher SEC, urban
Well educated, and employed in managerial jobs. Willing to try new things and pay for quality. Family is
important but also tends to be very individualistic. High on media use.
Recommendations
• Buy
Consumers tend to shop at open markets and kiosks more often than other channels; supermarkets are popular with trendy aspirants and progressive affluents. In addition to the unorganized retail landscape,
companies will have to navigate government–imposed price controls, which were a top concern among retailers interviewed in the study.
Food and grocery account for almost 40% of monthly spending. Consumers tend to be habitual in the brands they buy and affordability is the largest purchase driver. Trendy aspirants and progressive effluents are more likely to try new products. Category penetration is much lower in Ethiopia compared other countries surveyed, providing an opportunity to introduce consumers to new categories, especially energy
drinks, where interest to try is very high.
• Watch
Among those surveyed, TV and radio are the most popular media (92% and 80% penetration, respectively). Dramas, sports and news are top programming content across both platforms.
Ethiopian Television (ETV) is popular across all cities in Ethiopia, while radio is more regional in nature with each city having its own set of popular stations.
Print media and Internet are not prevalent, which may be explained by the low literacy rate (30%). Nearly
all progressive effluents read print and surf the internet, while trendy aspirants are also much more likely to utilize these media than the rest of consumers. And while over 70% of those surveyed own a cell phone, it is typically used only for basic services,like text messaging.
• Opportunity
In recent years, Ethiopia has emerged as one of the fastest growing economies in Africa with 10% percent GDP growth in 2015.
When launching new products in Ethiopia, it is advised that companies spend time understanding not only
trendy aspirants, but also the culture, people and traditions of all groups in Ethiopia. A media campaign that focuses on national TV will achieve critical exposure. Compared to other countries surveyed, CPG category penetration and consumer incomes are lower in Ethiopia. Low–cost products will help meet budget needs and introduce consumers to newer categories. Most importantly, demonstrate clear value to all citizens—those with money and those without—to attract and keep potential customers.
Emerging Market Insights Survey