Rabat – The Boston Consulting Group (BCG) reported in a recent study of the African retail market that the penetration rate of modern retail in Morocco is forecasted to grow from less than 20% in 2021 to roughly 30% in 2030.
BCG studied more than 4,500 small retailers in Morocco, Egypt, Kenya, Nigeria, and South Africa to assess the future of the African retail market.
The group concluded that the African retail market is diverse, as each country’s performance in the modern retail penetration and digital transformation indexes has varied.
Morocco, Egypt, and Nigeria, for instance, have not yet reached their modern retail potential, the study said. South Africa, however, recorded the highest African penetration rate of 70% in 2021.
In 2021, Morocco’s modern retail penetration was less than 20%, whereas Nigeria had a lower rate of roughly 5%. Egypt outperformed both countries with a penetration rate of less than 30%.
Nevertheless, the findings show that traditional retailers in the five markets tend to be young, educated, digitally savvy, and financially literate.
In Morocco, traditional retailers currently generate 82% of sales in the country, with 90% of them offering credit to their customers.
The retailers’ credit service, according to BCG, partially explains the resilience of the sector in the face of larger-scale modern retailers such as Carrefour, Marjane, and BIM.
However, the study found that 40% of traditional retailers in Morocco and Kenya would like to be affiliated with or serve as a franchise for modern retailers.
The percentages are even higher in Egypt and South Africa, where 50% and 60% of traditional retailers have expressed interest in joining the network of modern retailers as affiliated businesses or franchises.
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Future of Moroccan retail sector
As traditional retailers continue to dominate the Moroccan market, BCG expects modern retail, supermarkets, and proximity shops to expand their operations in the country over the upcoming years, as they introduce profitable solutions that address the needs of lower-income households.
Faced with competition from modern retailers, Moroccan traditional shops are expected to adopt digital payment and sourcing services.
BCG data, however, reiterates the findings of previous reports that show the low use of digital payment solutions in Morocco.
While 76% of Moroccan traditional retail managers own smartphones and 53% have a bank account, BCG said that Morocco has the lowest digital adoption among the five studied markets.
Only 1% of the studied Moroccan retailers currently use mobile money, whereas 29% of them use other digital services.
Meanwhile, 97% of the small retailers surveyed in Kenya said they accept mobile payments.
According to BCG data, Moroccan retailers have a higher age average of 39, while only 56% of retailers received higher education – the lowest rate among the five countries. These factors, along with the lack of public trust in digital solutions, might have contributed to the low use of digital payment services in the retail sector.
However, the recent acceleration in e-commerce services driven by the COVID-19 pandemic, the government’s efforts to advance digitization, and the surge in e-commerce solutions backed by the developments in the Moroccan startup ecosystem all point to the country’s potential to modernize its retail market.
