Afro Luxe: The Meaning of Luxury in South Africa

Abstract

In Africa, growth in wealth is a longer-term trend that hails a new era for the continent. According to Capgemini’s World Wealth Report (2012), the total investable wealth of high-net-worth individuals in Africa totalled US$ 1.1 trillion in 2011. To put this into perspective, this compares with US$ 1.7 trillion for high-net-worth consumers in the Middle East. South Africa and, most recently, Nigeria are regarded as the jewels in the African crown. Bain & Company estimates that Africa has more than 120,000 US$ millionaires compared to 95,000 in Russia. It is, however, South Africa that enjoys the lion’s share, with 71,000 millionaires; about 60 per cent of Africa’s total. Similarly, the continual rise of the upper-middle class has helped to place the country on the luxury map. It is estimated that, by 2020, 420,000 South African households will have disposable income that exceeds US$ 100,000 (Rice 2013). This has translated into the arrival of luxury brands including Cartier, Burberry, Louis Vuitton, Fendi, Gucci, and Salvatore Ferragamo at luxury retail locations such as V&A Waterfront in Cape Town or Sandton Mall and Hyde Park Corner in Johannesburg. South Africa has evolved as a luxury market destination. According to Euromonitor International, spending on luxury goods increased from US$ 628.5 million in 2007 to US$ 1 billion in 2012 (Warc 2013). There seems to be no slowing down this momentum as South Africa continues to indulge in luxury products and services.