We often encounter high-level insights about the rise of the African consumer, largely supported by strong economic growth and an emerging middle class.
Between 2011 and this year, seven of the 10 fastest-growing economies in the world were in Africa.
Insights from the Mining Indaba earlier this year included that foreign direct investment in consumer businesses had completely eclipsed mining investment, with 17% attributable to retail and consumer products, while mining got a mere 2% of the spoils.
So what is the appropriate retail strategy to adopt? Do you target the mass market or the luxury end? The answer is simple - you simply cannot afford to take for granted the purchasing power of either a mass-market customer or a wealthy consumer.
Africa is not a country. There are more than 500 ethnic groups, speaking more than 2000 languages spanning 54 countries - and herein lies the complication. To varying degrees, the retail landscape is largely fragmented and informal. To illustrate, in Kenya, the formal retail sector accounts for 40% of grocery sales; in Nigeria only 5% of food is bought in the formal sector.
So, given that luxury stores tend to have more prominence in shopping centres, Kenya would be, in this case, a more strategic growth destination than Nigeria.
Not surprisingly, L'Oréal established a new unit in Kenya in 2011 to serve as a base for expanding its activity in East African markets.
It is no myth that in Africa, size does matter.
And who better than Whitey Basson, the CEO of Shoprite Holdings, to emphasise that through his optimism about the Nigerian market? The Nigerian food retail sector grew at a compounded annual rate of 13.2% between 2009 and 2013, with revenue of $46.2-billion in 2013.
Today, Shoprite is Africa's biggest food retailer, with operations in 16 countries, including Angola, Botswana, Ghana, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Tanzania, Uganda and Zambia.
According to the Deloitte Consumer Review Africa 2014, East and West Africa make up the bulk of the continent's population. Mass market strategies should therefore be geared towards these regions. Heeding the call, Unilever, a veteran in these markets, accounted for 31% of detergent sales in Nigeria and for a 33% share in Kenya.
One of the channels in retail that has caught the attention in recent years is e-commerce, amassing a sizable $1.2-trillion market size by the end of 2013.
With the extraordinary growth of mobile technology in Kenya over the past five years, it appears Nigeria's Jumia is going for gold when it comes to e-commerce in Africa. Jumia, with a company valuation of about $550-million, is backed by Rocket Internet - a company headquartered in Germany that supports global e-commerce start-ups.
As it stands, however, despite the aggressive growth in mobile money, the most prevalent use is that of cash transfer services rather than as a payment mechanism. Angola is the only exception, with about 12% of mobile money services used as a payment mechanism. Players in this space will have to find innovative ways to transform the $395-billion (about R5.5-trillion) mobile money transfer market into a sizable mobile payment opportunity.
What's a wonder story without a third force?
Retail property development, despite a recent tapering off in growth, is set to be the driver of the formal retail market growth on the continent. Urban populations are rising, making it easier to reach consumers, and this strengthens the case for retail property development.
The story for increased urbanisation works in favour of both mass market and luxury market retail strategies. On the luxury side, it presents a pretty playground where the rich kids can play.
In the mass market, it creates an opportunity for retailers such as Shoprite, Nakumatt, Carrefour and Massmart to become anchor tenants in new retail centres developed by companies such as Actis, Atterbury, Stanlib and Old Mutual Properties, which have been at the forefront in driving retail property development in Africa over the past five years.
The African retail space resembles that childhood treat, Baker's "Choice Assorted" biscuits: abundance and different flavours and offerings all in one box.
The African retail market is an environment in which most brands that understand their identity can flourish. But it can be hostile to brands that have no understanding of the market they purport to serve. Doing your homework is the biggest favour you can do for yourself before and during your venture into the market, irrespective of your target - mass market or luxury retail.
Skenjana has an MSc (finance) from ESADE Business School in Spain and a B.Bus.Sci (finance honours) from the University of Cape Town. He is an independent adviser and research consultant on African industry, financial and capital markets