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South Africans happy to pay for premium products

| Economic factors

A phenomenal 92 percent of South Africans are willing to pay an above-average price for products that deliver higher quality, offer superior functioning (91 percent) or stand behind environmentally responsible (86 percent) or socially responsible (77 percent) principles.

This is despite economic limitations, with only 50 percent of the population saying they are financially better off than five years ago, Nielsen said on Monday.

This was just one of the highlights of the recently released Nielsen Global Premiumisation Survey, revealing how and why premium products are experiencing higher demand and strong sales growth in South Africa. Nielsen Head Emerging Markets Thought Leadership Ailsa Wingfield comments “As consumers move up the economic ladder, they’re attracted to aspirational brands that signal they’ve achieved a certain level of success. Nonetheless, for many, disposable incomes remain limited, and for these consumers, trusted brands provide an assurance of quality, minimising the risk of wasting money on a product that doesn’t fulfil expectations.”

For those local respondents in the study who indicated that they are significantly or somewhat better off financially, the products/services that are more accessible to them today, versus five years ago, are improved technology (72 percent), better education (49 percent) and more premium products (35 percent), Nielsen says in a statement.

The survey polled more than 30 000 online consumers in 63 countries.

It adds sentiment is not necessarily income-dependent. With only 45 percent of respondents reporting they’re able to spend freely or comfortably purchase items that they want, 54 percent cite premium products being worth the money and 50 percent because these products make them feel good. Although, brand trust remains integral to a purchase, 59 percent of respondents believe that premium claims are a way for a brand to just charge more money.

BUSINESS REPORT ONLINE

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