Middle Class

The rise and rise of SA’s black middle class

South Africa’s black middle class has more than doubled over the last eight years according to new research by the UCT Unilever Institute of Strategic Marketing. Growing from 1.7 million South Africans in 2004 to an estimated 4.2 million in 2012, the black middle class now exceeds the number of white people in the same income bracket.

The UCT Unilever Institute of Strategic Marketing presented its findings of a new study on the black middle class in South Africa at an event this week, reports Supermarket & Retailer.

Over 6 000 interviews were conducted for the study that looks at the rising black middle class in South Africa and its effect on the economy.

“South Africa’s black middle class continues to rapidly expand and is more influential and powerful than ever before,” says Prof John Simpson, one of the Unilever Institute’s directors.

The white middle class has stagnated in contrast, showing less than 3% growth from 2004-2012.

“What determines the middle class of any society is relative to that society,” says Simpson. “The middle class in South Africa is essentially about lifestyle.” The black middle class is hugely aspirational and is defined by this more than income.

Lifestyle changes

According to the study, the black middle class are first generation black African adults with a household income of between R16 000 – R50 000 per month. Members of this class are seeking their own identity and are very optimistic about the future.

They are however subjected to unique tensions. 39% of respondents feel that the pressure to support their families has increased. Other tensions include living the middle class lifestyle versus being in debt and living in a suburb versus living in a township.

Despite these tensions, the black middle class continues to make lifestyle choices.

With a combined spending power of R400 billion compared to the R380 billion of its white counterpart, the black middle class is enjoying luxuries like going out for meals and ordering takeaways. Car ownership has risen by 1.1 million since 2004 and the majority plans at least one vacation a year. New hobbies like exercising are also being enjoyed.

Different waves of middle class

The study differentiates between different waves of the black middle class.

There are 1.9 million ‘aspirants’ who have a household income of between R10 000 and R16 000 per month yet do not qualify as middle class. Aspirants do however have a desire to get there and will be the ones fuelling future growth. Despite being confronted by the burden of debt and the scarcity of jobs, they are working towards the perception of the middle class lifestyle.

The ‘mafikizolos’, or those who have ‘just arrived here’, have recently experienced hardship and overcome huge odds. They have often had some level of advantage, such as education.

The ‘second wave’ is younger and grew up in a middle class environment. They are second generation and therefore better prepared and educated. They have more realistic aspirations and experience less pressure from their extended family.

The ‘forerunners’ are the first group to reach the middle class. They remember the hardship they once faced and take pride in their achievements. They have a great fear of slipping back. They have learnt from the recession and now have more realistic and modest expectations.

All these groups are still playing catch-up with the white middle class, despite having overtaken it in numbers and spending power.

Township living

Township developments better enable a middle class lifestyle within them. The decision to live in the township instead of the suburbs often is a practical rather than a status decision.

Only 12% of respondents would actually prefer to live in a township but many trade-off living in a poorer area for the complete middle class lifestyle package, including cars and DStv.

Township connections remain strong among the black middle class and result in a lot of movement between the city and ‘home’.

The development of shopping malls in the townships is catering to the ‘mall mania’ experienced by the black middle class. Malls are fresh and exciting and shoppers can buy ‘hot’ brands from stores they trust.

The study shows that, following the recession, the majority however spends more cautiously and does a great deal of online research before going out to make purchases.

Market of the future

The black middle class has much disdain for brands from their past, for example Lucky Star. They would rather invest in perceived luxuries, such as Five Roses tea and Kellogg’s All Bran cereal.

Brands like Lucky Star have to constantly reinvent themselves and offer new selling points to these shoppers in order not to lose them. Brands like Dickies and Converse have been successful in this regard.

For businesses to target this group effectively, they will have to invest the time to understand the black middle class and develop a resonance with this market.

“It is a market too big to ignore. The black middle class has grown fast and will continue to grow,” says Simpson.

Businesses who support this growth – by developing products that suit the market and speak to its different segments – will be successful.

“Target the aspirants – they are the future. If you treat them as such they will never forget you, but if you don’t, they will never forgive you,” concludes Simpson.

Related reading:

Getting to grips with SA’s mass market