Consumer optimism in East Africa has plummeted to a new low of 50 per cent, down from 70 per cent in 2019, on tough economic times, according to the Kantar Africa Life Report 2023.
This has been attributed to economic uncertainties that has pushed consumers to spend cautiously.
The survey conducted in the first half of 2024 in Nairobi, Mombasa, and Kisumu, highlights several strategies consumers are adopting to spread the shilling.
Findings from the report shows that Kenyans are now buying fewer items, reducing purchase frequency or opting for cheaper alternatives.
They are also changing their interactions with financial institutions by relying more on micro-lending solutions and informal banking for easier access to money.
Last year, the government introduced several tax measures in the Finance Act, 2023 that added pressure on taxpayers, with some taking effect in the second half of the year, pushing up the cost of living.
Kantar Associate Account Director David Ogara said that with challenging economic times, it’s been interesting to understand how consumer perception and brand value offerings have evolved.
“Inflation has divided brands and products between ‘must haves’ and ‘nice to have,’ creating a clear distinction when purchase decisions are being made. The survey brings to light great insight for brands navigating value offering,” said Ogara.
This comes at a time when the global economic downturn is filtering through to the Kenyan economy.
The survey shows consumers are gravitating more towards flexible lending policies without steep penalties; and also seen households move away from electricity to solar energy due to high and rising electricity prices.
They are also moving away from paid streaming services, as noted by Forbes in February 2024. Instead, they are engaging more with free, content-based services.
With the increased adoption of e-commerce, consumers are conducting more research before making purchases. There is a growing emphasis on differentiation, with consumers punishing premium or value brands that do not stand out from lower-priced mainstream options.
In light of difficult economic times, betting companies have dropped out of the Top 10 rankings as consumers no longer have the luxury of spending disposable incomes on betting.
