28 Jan 2014 SA’s black middle class plays catch-up
SINCE at least the 1960s, the prospects for growth of the black middle class have animated commentators and marketers alike, writes Prof Servaas van der Berg, professor of economics at Stellenbosch University.
The reasons are obvious — a growing middle class holds out the hope of a more stable and mature democracy, and the demographic dominance of the black population means that their entry into the middle class promises lucrative prospects in the consumer market.
Yet, time and again, those observing consumer patterns of the middle class have been surprised by the substantial differences in the consumer behaviour of white and black members of the middle class. Why do black middle-class consumers have different patterns to their white counterparts? What do these differences mean for the prospects for growth of the market for high-end goods?
Analysts have advanced at least three explanations.
The first possible explanation is that, for historical and/or cultural reasons, black consumers have a greater desire for conspicuous consumption — consumption that is visible and can be seen as a statement of the individual’s or household’s status.
This view has recently been advanced by a German researcher, Wolfhard Kaus, who undertook a detailed study of the extent of conspicuous consumption and found that black and coloured households spent about 50% more than white households with similar income levels on visible-consumption goods “that are portable and easily observable in anonymous interactions”.
He concludes that “concerns for status … appear to be an important factor in explaining differential spending on visible consumption across social groups”.
According to his analysis, this applies across the income distribution and not only to the middle class. A less nuanced version of this argument holds that conspicuous consumption is more common among black middle-class consumers because they constitute a first generation that has had an opportunity to rise up the income ladder. According to this view, those who have been economically successful wish to demonstrate this by their lifestyle and want to do so conspicuously.
A second possible explanation of the differences in consumption patterns between white and black middle-class consumers is the “black diamonds” perspective. According to this hypothesis, black middle-class consumers have distinctly different tastes, which are culturally determined, to their white counterparts. Marketers need to understand these cultural factors and tastes and ignore them at their peril.
This school of thought has been advanced particularly by the University of Cape Town’s Unilever Institute, led by Professor John Simpson….