Emerging wealthy segment shines up consumer spend
June 24, 2007
Black diamonds - the well-to-do black middle-class group - account for 28 percent of total consumer spending in South Africa, according to research from the UCT Unilever Institute (UCTUI) and TNS Research Surveys .
Included in the segment are individuals who are wealthy, educated and have high-paying jobs, and youths from well-to-do black families.
The study, based on interviews of 4 500 black diamonds across seven major metropolitan areas, finds that the average monthly income for this group was R6 100 at the beginning of this year, from R5 900 in 2005. This compares favourably with whites' average incomes of R6 000 and R5 800, respectively, for the same years.
Black diamonds spend about R180 billion a year, amounting to 54 percent of total consumption spending for all black people. South Africans of all races spend a total of R640 billion a year.
According to UCTUI and TNS, cheap credit has helped the black diamonds increase their spending.
Last year South Africa's total home loans market grew by an average of R13 billion a month. It accounts for 68 percent of all loans taken by the group. About 95 percent of black diamonds believe in owning a home
Vehicle finance amounted to 24 percent of loans taken up by black diamonds, with the remainder going towards the purchase of electrical and durable goods, credit cards and retail purchases.
Gauteng is home to the majority of black diamonds, with 66 percent of the group living in South Africa's economic hub. The proportion of such individuals living in suburbs such as Sandton has increased from 23 percent in 2005 to 47 percent this year.
The research shows that this represents movement of more than 12 000 families, or 50 000 individuals, per month.
Most of the black diamonds surveyed said they visited townships and spent their "suburbs" income there.
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