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Black middle class explodes

May 22 2007 11:03 AM

Johannesburg - South Africa's black middle class, increasingly referred to as Black Diamonds, has grown by an astonishing 30% in just over a year, according to a major new study conducted by UCT/Unilever Institute of Strategic Marketing and TNS Research Surveys.

Containing extensive qualitative research, the new study Black Diamond 2007: On the Move, is based on a sample of 4 500 people and follows two previous studies by the well-known research partners. Its findings show that Black Diamonds now comprise an estimated 2.6 million South Africans as opposed to 2 million in 2005.

Professor John Simpson, Director of the UCT/Unilever Institute and Neil Higgs, Director of Innovation and Development at TNS Research Surveys say Black Diamond 2007 reveals unprecedented movement in South Africa's single most important market.

The new statistics show that there is not only growth from new entrants into the Black Diamond segment, but also from within its ranks as people move up the ladder and establish themselves in the middle class, say the researchers.

Black Diamonds combined annual spending power had grown tremendously since the last study conducted over a year ago from R130-billion at the end of 2005 to R180-billion at the beginning of 2007. "Perhaps the most important figure here is that 12% of South Africa's black population - that is Black Diamonds - account for over half (54%) of all black buying power.

"This compares with 10% accounting for 43% of black buying power 15 months ago," says Professor Simpson.

In the earlier Black Diamond studies conducted at the end of 2005, researchers found many respondents that lived in townships expressed the desire to eventually move to the suburbs.

"This prediction has proved correct, with the number of Black Diamond families living in suburbs in South Africa's metropolitan areas growing from 23 to 47% in the past 15 months," explains Higgs

TNS Research Surveys' Nomsa Khanyile says many Black Diamonds interviewed claimed their hearts were still in the townships, but cite 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. 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 Black Diamonds live now 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. The latest estimates reveal 1.2 million Black Diamond adults in the suburbs (47%) and 1.4 million in the townships (53%)," Khanyile adds.

According to Professor Simpson, this migration doesn't mean that Black Diamonds 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."

The contribution of this group to total buying power has grown considerably in absolute terms, reflecting an increase of R50-billion in just over a year.

Summing up their new findings, the researchers say this market is changing so fast that one of the main challenges is to keep up. "The latest study is bigger in every sense and is designed to help marketers get to grips with the latest developments. It is also clear that marketers and businesses have not yet got to grips with this market and the therefore may be missing the opportunities it presents," says Professor Simpson.

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Comment on this article
- Need some income tables to exactly understand
- But the buying power increase speak for itself. I just fear the explosion will come when the economic laws of productivity (inputs vs. outputs) start kicking in over and above artificial push.
Bloody angry Mary on 8/7/2007 8:56:56 AM
- At least things are changing and fast!
- Hey Im just pleased that the great divide appears to be closing. I cant stand living in a country where there are so many desperately poor people that shooting a baby for two cell phones and R130 is ok. The faster this middle class grows the better for everyone. Even if the data is skewed and not that accurate, you cant deny that things are changing for the better. Every time I see a successful young black woman in a BMW I just grin! And it IS the black women of South Africa who are driving this change.. A better future is coming - and it cant happen fast enough. Now if we could just pay our teachers enough so that the profession attracts and keeps more great minds - who knows where this country could be in ten years?
Mlungu on 8/7/2007 8:56:49 AM
- middleclass
- Mlungu, if you think that driving a BMW is the reason for things moving fast, think over. That does not reflect a prosperous country. In fact. Dont look at the obvious surface stuff, look deeper, dig deeper and watch. Welfare of a country is honest truth, respect, selfrespect proper working departments, etc. Not a BMW.
amazed on 8/7/2007 8:56:48 AM


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