Key takeaways
- Five markets — South Africa, Nigeria, Egypt, Morocco, Kenya — account for roughly 67% of Africa’s banking revenues and dominate most retail expansion strategies, while Côte d’Ivoire and Tanzania grow faster with a fraction of the capital.
- More than 80% of Africa’s retail activity still flows through kiosks, open markets, and small neighborhood outlets. The playbook most global brands arrive with was never designed for this commercial architecture.
- Africa’s e-commerce market reached $40.5 billion in 2025, with over 60% of transactions occurring via mobile. Yet, South Africa’s formal retail sector and Carrefour’s 34-store Kenya operation demonstrate that the right model varies significantly by market.
The African retail market crossed a threshold that is hard to overlook. African consumer spending surpassed $2 trillion in 2025, driven by a population growing at over 2% annually, a working-age group expanding faster than any other region, and real purchasing power accumulating in markets that formal retail has barely reached. The scale of the opportunity is both measurable and specific.
What is less clear is whether the brands arriving to capture it have understood where it sits. Most global brands approaching Africa are making two errors at once: concentrating on the five markets that look most familiar and importing a physical-first retail playbook that the continent’s commercial architecture has already made redundant. The underlying error in both cases is the same: reading Africa through a retail lens that was built somewhere else.
Old map, new growth
The five markets that appear on virtually every investor deck — South Africa, Nigeria, Egypt, Morocco, Kenya — generated roughly 67% of Africa’s banking revenues in 2024 according to McKinsey’s March 2026 analysis. They are the markets that most closely resemble a conventional retail environment: shopping centers, formal wholesale distribution, established cold chains. They make sense to a retail executive presenting a market-entry plan to a board in London or Paris.
What usually gets overlooked: Côte d’Ivoire posted an 11.6% compound annual growth rate in banking revenues between 2019 and 2024. Tanzania posted 11.3%. Both are outpacing the Big Five with a fraction of the capital flowing in. Retail expansion in Africa has been following a map drawn a decade ago, but growth has moved on.
Carrefour is one of the few global retailers that appears to have noticed. Ιts Carrefour 2030 strategy, announced in February 2026, targets 22 African markets, with franchise agreements already signed in Ethiopia and Ghana. This is where the growth is. The capital has just been looking in the wrong direction.
What the African retail market looks like
More than 80% of Africa’s retail activity still takes place through kiosks, open markets, and small neighborhood outlets. According to the United Nations Economic Commission for Africa (UNECA), approximately 90% of retail transactions across the continent flow through these channels: 96% in Ghana, 98% in Nigeria, around 70% in Kenya. South Africa is the only large Sub-Saharan market where formal retail clearly dominates. It is worth understanding why. Formal retail works there because the conditions for it were built first, because the infrastructure genuinely exists to support it.
The distance between that reality and most market-entry assumptions becomes visible at country level. According to the Knight Frank Africa Report 2024/25, an estimated 90% of food and beverage sales in Tanzania flow through traditional small stores, street vendors, and unregulated markets. In Uganda, formal retail has only begun to take shape over the last decade, and, even there, growth has come through neighborhood centers and convenience formats, not the anchor-store mall model that defines expansion elsewhere. This is the norm across most of the continent.
Trade runs on proximity purchasing, small quantities, informal credit, and personal relationships between buyer and seller that formal retail was never designed to accommodate. Loyalty to individual salespeople runs at 78%, against 72% loyalty to brands.
Success in this market has consistently come down to one thing: showing up where and how people really shop.
Mobile first, retail second?
In many countries across the continent, the standard retail expansion sequence — physical infrastructure first, digital layered on top — never applied. M-Pesa, the mobile money platform that transformed payments in East Africa, now serves 60 million customers across eight markets. E-commerce in Africa reached $40.5 billion in 2025, with over 60% of transactions occurring via mobile. Digital payments and mobile-first commerce are already the infrastructure on which everyday African consumer spending flows, built over the last decade while formal retail was still debating whether to enter.
BCG’s July 2026 analysis of Africa’s digital economy frames the scale of this: the continent’s digital sector sits at 5% of GDP against a global average of 15%, but mobile connectivity has already boosted African GDP more than in any other developing region. Behind those numbers is a simpler fact: in many African markets, mobile commerce got there first. Formal retail is still catching up.
AI adoption in retail is accelerating this further. Across global grocery retail, brands embedding technology into supply chains, inventory, and customer engagement are widening the distance from those that are not. In Africa, the question is whether that technology gets deployed in ways that work with how commerce already functions in each market or arrives as another imported format that ignores it.
Two answers to the same question
Africa’s largest food retailer, Shoprite with 3,478 stores and annual sales exceeding $15.6 billion, tried to expand across the continent and spent the last four years reversing course. It exited Nigeria in 2021, then Uganda, Kenya, and the DRC. Its footprint today is almost entirely Southern Africa, the markets where its physical distribution model still holds.
As noted earlier, Carrefour is moving in the opposite direction. Beyond the franchise agreements already signed in Ethiopia and Ghana, it now operates 34 supermarkets in Kenya and sources approximately 99% of its products locally.
Jumia, Africa’s largest e-commerce platform, exited South Africa and Tunisia, two of the most conventional retail markets, in October 2024 to concentrate resources on West and East Africa, where mobile-native commerce is the norm. It reported a 34% revenue surge in Q4 2025.
Each of these moves reflects a different reading of what the African retail market genuinely demands. One reading points to Southern African shopping centers, formal distribution, and the infrastructure of a market that looks familiar. The other points to franchise networks built on mobile payments, local sourcing, and proximity.
Carrefour will have a presence in 22 African markets by 2030. Shoprite currently operates in 10, having spent four years reducing that number. The two trajectories are moving in opposite directions, but both are deliberate choices about which version of this market each company believes in.
