People


SA's booming black middle class

24 May 2007 South Africa's black middle class has grown by 30% in just over a year, with their numbers increasing from 2-million to 2.6-million and their collective spending power rising from R130-billion to R180-billion. That's according to a new study by the University of Cape Town's Unilever Institute of Strategic Marketing and TNS Research Surveys. The study, Black Diamond 2007: On the Move, is based on a sample of 4 500 people and follows two previous studies by the research partners. UCT/Unilever Institute director Professor John Simpson and TNS Research Surveys' Neil Higgs say the study reveals an unprecedented movement in South Africa's most important economic grouping. "It is also clear that marketers and businesses have not yet got to grips with this market and therefore may be missing the opportunities it presents," Simpson said in a statement on Monday. The new research shows that there is not only growth from new entrants into what the institute terms the "black diamond" segment, but also from within its ranks as people move up the ladder and establish themselves in the middle class. Spending power The combined annual spending power of South Africa's "black diamonds" had grown tremendously since the last study, from an estimated R130-billion at the end of 2005 to R180-billion at the beginning of 2007. In comparison, white South Africans' annual collective buying power increased from R230-billion to R235-billion and that of black South Africans collectively from R300-billion to R335-billion over the same period.
Annual claimed buying powerLast quarter 2005 estimateFirst quarter 2007 estimate
WhitesR230bnR235bn
Blacks: totalR300bnR335bn
Black diamondsR130bnR180bn
"Perhaps the most important figure here is that 12% of South Africa's black population account for over half (54%) of all black buying power," Simpson said. "This compares with 10% accounting for 43% of black buying power 15 months ago." Maintaining township connections In 2005, many respondents living in South Africa's townships expressed the desire eventually to move to the suburbs. "This prediction has proved correct, with the number of black middle-class families living in suburbs in South Africa's metropolitan areas growing from 23% to 47% in the past 15 months," Higgs said. TNS Research Surveys' Nomsa Khanyile said many of those interviewed this time around claimed their hearts were still in the townships, but cited pragmatic reasons for making the move to the suburbs. "As well as making a sound property investment, their reasons include tighter security and better-resourced schools for their children," Khanyile said. "Some also reported feeling societal pressure to move to the suburbs as it represented a visible mark of success." There is a considerable change in where South Africa's black middle class live compared to 15 months ago. "At the end of 2005, we estimated that 23% (0.45-million) lived in the suburbs and 77% (1.55-million) lived in the townships," Khanyile said. "The latest estimates reveal 1.2-million 'black diamond' adults in the suburbs (47%) and 1.4-million in the townships (53%)." According to Simpson, this migration doesn't mean that black middle-class families are turning their backs on townships. "Our study shows that a high percentage of 'black diamonds' who have moved to the suburbs return to townships on a regular basis. Even though they live in the suburbs there remains a strong desire, right across the board, to maintain their township connections." SouthAfrica.info reporter
Using SAinfo material Want to use this article in your publication or on your website? See: Using SAinfo material
Young South Africans ride high on optimism South Africa's young people believe they are better off than their parents were - and that their children will be even better off than they are now (Photo: South African Tourism)

New business development

New markets, trends in small business - and opportunities in unexpected places.

Black economic empowerment

News, features and links.

Photo galleries

The Rainbow Nation

South Africa is a culturally diverse country, one nation made up of many peoples.

MediaClubSouthAfrica

MediaClubSouthAfrica.com

Helping the media cover the South African story >