Of course there is the odd exception, South Africa for one, and certain countries in the Maghreb, but the fact remains that Africa has been left out of Swiss watchmaking’s fabulous expansion these past two decades. Not enough potential customers, too much insecurity, both political and economic, not to mention the nagging problem of corruption. Problems such as these, which many consider as without solution, discourage brands from venturing into this market.
Yet Africa is waking up and beginning to make its roar heard. Banks, investment funds and consultancy firms see signs that the continent is ready to take off. For them it represents a “historic investment opportunity” to quote a recent research note by Natixis bank. Even the International Monetary Fund (IMF) is optimistic for the sub-Saharan economy. “Global headwinds have moderately lowered sub-Saharan Africa’s growth in 2013, but the pace is expected to pick up in 2014,” it writes in a regional economic outlook survey, adding that “output is projected to expand by 5% in 2013 and 6% in 2014.” According to the IMF, investment is progressing, in particular foreign investment in the continent’s natural resources. Trade, services, banks and public works are also driving growth. Africa is a young, urban, optimistic continent whose middle class is expanding in both size and wealth.
Gains for the first to market
None of this has escaped luxury brands, watchmakers among them. In a recent interview, the two joint CEOs of Richemont, the world’s second-largest luxury group, declared that a window of opportunity was beginning to open. Said Richard Lepeu, “The continent is starting to enjoy explosive economic growth and has the biggest short-term potential. A lot is happening in this region, which has a population of one billion and soon two.” Bernard Fornas concurred: “Africa is starting to wake up and we need to keep an eye on it. This doesn’t necessarily mean that we are going to open a Cartier store tomorrow morning in Nigeria or Angola. But the time when we will is not that far away. There is always a risk for pioneers like us, especially on new markets, but also a bonus for the first to market.”
The already affluent classes should be first to benefit from Africa’s economic rebound, but not only them. The middle class, which the African Development Bank estimates at 300 million people, is attracting the attention of luxury’s foremost names, including carmakers, all eager to build relations with these potential customers. Porsche, for example, has opened a spanking new showroom in Victoria Island, one of the ritziest parts of Lagos, just minutes from the Intercontinental, the first five-star hotel in the country’s commercial capital. Still not convinced? According to Jeune Afrique news magazine, there are more millionaires in Africa than in Russia. Men’s fashion house Ermenegildo Zegna, which has points of sale in Morocco and Egypt, has already set up shop south of the Sahara, in Nigeria, and soon Angola. Both countries are home to über-wealthy businessmen who have made their fortunes in the oil industry.
Angola invests in Switzerland
It will still take time for watchmakers to settle in Africa, with the attendant financial risks. Ones that Richemont, which belongs to the South African Rupert family, seems willing to take. “Africa offers enormous potential,” agrees German automaker Mercedes. It operates an assembly plant in South Africa where 20,000 of its cars are sold each year. As for BMW, which sold 34,000 cars across the continent in 2012 – 15% more than the previous year – now is the time to develop in these markets. Countries such as Gabon and Ghana offer genuine opportunities, says the brand. That should convince even the most reluctant. Turning the tables, Africa has already set its sights on Swiss watches. In 2012, Geneva-based brand De Grisogono was taken over by investors of various nationalities, including from Angola.