The UCT Unilever Institute of Strategic Marketing recently released the results of its research into South Africa’s booming black middle class. Sandra Burger, business unit manager at The MediaShop takes a look at key findings of the study.
A strong black middle class (BMC) is arguably one of the most crucial segments to the wellbeing of our country as this group has significant impact on boosting our economy, encouraging job creation and contributing to a broader skills base through education.
According to AMPS 2012 January – June, the black South African adult population (18+) represents 76% of the total South African population. Since 2004, this segment has increased by 4.224 million people!
The UCT Unilever Institute has just released its second wave of research on the black middle class. In it there are more in-depth observations than the previous wave. The Institute argues that the BMC is too large to be ignored by marketers because it is growing rapidly and is a dynamic force to consider.
Unlike the white middle class, which is in its third plus generation, the black middle class represents a first generation of individuals.
They grew up in rural areas, but have largely migrated to urban or metropolitan areas: 46% reside in Gauteng, 18% in KwaZulu-Natal, 8% in Eastern Cape and 3% in the Western Cape.
They’re seeking their own identity
Because the black middle class stems from a historically unequal (social and financial) society that has had its own challenges, they have remained upwardly focused, while the white middle class has remained static. Successful BMC consumers have weathered a recession, which was preceded by a euphoric period of economic boom, indulgent shopping sprees, high wage negotiations, education opportunities and where credit was offered freely.
Aspirational and on the move
Their average overall spending power is over R400 billion, which has surpassed that of the white middle class. The BMC segment is, however, still lagging by R3 154 per month in average personal income. The support to their extended and own families is staggering, with 39% of BMC consumers being supported by cash grants.
They’re driven by their aspirations and not by income. The purchasing of household assets by black middle class consumers for convenience (microwave, washing machines) and entertainment (DVD and PCs) has skyrocketed and is separating this group from their traditional families.
When it comes to occupation, 32% claim to be professional workers and almost a third say they have secondary incomes. Their entrepreneurial skills are evident in that 13% of BMC consumers own a business; 75% want to own a business. This spirit is however truncated by the little support received from government and the banking sector in terms of the number of loans that are being granted. Inspired by their parents, education remains a ticket to success for BMC consumers. They’re investing in schools with higher fees for their children, and almost 50% have post-matric qualifications.
Eighty percent of the segment claims to be better off than five years ago and they’re driving economic growth supported by credit, education and BEE. The recession has forced them to be much more conservative in their credit management, savings and selections processes. With only 30% of the segment claiming to be suffering the effects of the recession, the reality is that there is a real sense of economic maturity within this group.
They’re subject to unique tensions
The black middle class has moved from fearing the future to embracing a sense of safety. This is driven by a sense of financial literacy, recognition of their skills, enablement and is represented in the choices they’re experiencing. Consumers at the bottom end of the scale have high aspirations, but the debt burden and scarcity of jobs hamper fast traction.
Nevertheless, the black middle class is relishing its newly found status by indulging in top end brands, but have little brand loyalty. The recently ‘arrived’ group has overcome huge odds although some level of advantage has played in their fortune. They’re charged with expectations and will do anything to achieve more, fuelled by the success they’ve already achieved.
The forerunners in this segment have huge pride in their achievements (of which some is self-imposed due to the fear of disappointing their families) and yet they remember their hardships. They’re big dreamers and their positive attitude exudes an ‘anything is possible’ attitude.
They’re not going to slip back and veer away from associations of the past. They consume brands that can enhance and set them apart from the average. The black middle class consumers feel they are still playing catch-up to some extent and perceive the white middle class to be one step ahead of them.
However, this segment expects to move to the front of the line soon and is intolerant of waiting. In terms of entertainment, dining has become a leisure activity, regular weekend takeaways are a normal occurrence and they’re in the mind-set of saving up for months for an annual holiday. On a social level, this group enjoys regular socialising, playing and watching soccer and participating in regular exercise.
In a nutshell, the black middle class:
• Aspires to independence, but is still largely trapped with family responsibility limiting them from self actualisation
• Seek reassurance and recognition
• Like the lifestyle, but are not debt free
• Acknowledge the legacy, but catch-up is paramount
• Are often confronted with the suburb living vs. township dilemma and costs
• Tradition is cherished but modern is in
• Their mother tongue is used to communicate with family while English is used for themselves and their offspring
• Seek a stable job vs. entrepreneurship
• Can afford a car and realistically drive a Toyota or Volkswagen
• Pay off debt and invest in the future
• Can afford some wants (dressing well is essential)
• Own a good home and ‘the lifestyle’
• Like to live in a suburb for practical reasons, but 28% are still living in townships
• They shop at malls and favour Edgars, Woolworths, Mr Price and Truworths
• Send their children to good schools (40% of households have large families consisting of five or more individuals)
• Have financial stability and are a self-help generation
• Internet access has increased by 42% since the first wave research. They’re most likely to juggle between notebooks and cellphone screens whilst watching TV
• 58% have a Facebook profile and are logging on at least once a day
• Enjoy DStv entertainment (albeit Compact bouquet) and 90% are still watching SABC1 (some via DStv), followed by SABC2, e.tv and SABC3
• They’re reading Daily Sun, Sowetan, Isolezwe and The Star
• Are listening to MetroFM, Ukhozi, KayaFM and LesediFM
• They’re noticing brands such as FNB, Samsung, BMW, Mercedes, Hyundai
• 90% regard themselves as fluent in English
Source: UCT Unilever Institute, Black middle class Growth, May 2013
This story was first published by The MediaShop in its newsletter, and is republished here with their permission.