tradional trade in africa

Traditional Retail Trade in Africa

In the dynamic landscape of Africa’s retail industry, traditional trade offers a unique glimpse into the continent’s rich tapestry of traditions and customs.

Traditional retail trade is the selling of goods within local communities, through informal channels such as open-air markets, roadside stalls, and neighbourhood shops. Unlike formal retail, which operates within structured frameworks and commercial institutions, traditional retail thrives on personal interactions and cultural nuances.

Steve Johnson, Managing Director of Frontline Research Group, says, “In traditional trade, transactions are almost exclusively conducted in cash and they rely heavily on face-to-face interactions, where negotiation skills and interpersonal relationships play crucial roles.”

Distinguishing Traditional Retail from Formal Retail

While formal retail is characterized by standardized processes, regulated environments, and corporate entities, traditional retail operates in a decentralized manner, deeply embedded within local communities. Formal retail often relies on modern technologies, supply chain logistics, and marketing strategies to drive sales, whereas traditional retail emphasizes personal connections and word-of-mouth recommendations.

Moreover, traditional trade places a premium on cultural values and social cohesion, with transactions often influenced by factors such as kinship ties, reputation, and community dynamics.

Steve says, “Unlike formal retail, which tends to prioritize profit maximization, traditional retail may prioritize customer satisfaction and communal well-being.”

The Significance of Traditional Retail in Africa

Traditional retail plays a vital role in Africa’s retail landscape, catering to the needs of millions of consumers, particularly in rural and peri-urban areas where formal retail infrastructure may be limited. While precise data on the size and scope of traditional retail in Africa is challenging to quantify due to its informal nature, it is estimated to account for well over 50% of the retail industry and amounts to more than half a billion USD annually.

Nuances of Traditional Retail

Within the realm of traditional retail, a myriad of nuances shape the retail experience. Traders rely on localized knowledge and market insights to curate their product offerings, tailoring them to the unique preferences and tastes of their clientele. Customer loyalty is often built on personal relationships and trust, with repeat business driven by exceptional service and quality products.

“Traditional Trade caters to consumers of all income levels and is popular with people from all economic backgrounds.  This is due to the convenience of traditional trade outlets and because there is often a personal relationship with the stallholder. These outlet owners live in the communities they service,” adds Steve.

Retail Data in Traditional Trade

Gathering data on traditional retail trade in Africa can be challenging due to several factors:

1. Informal Economy: Much of retail trade in Africa occurs within the informal economy, which often operates outside of formal regulatory frameworks. This makes it harder to track and quantify transactions.

2. Lack of Infrastructure: Many traditional retail markets in Africa lack basic infrastructure such as internet connectivity, electricity, and computerized record-keeping systems. Without these tools, collecting data becomes cumbersome.

3. Fragmentation: Traditional retail in Africa is often characterized by small-scale vendors operating independently or in small clusters. This fragmentation makes it difficult to capture comprehensive data, as there may be numerous small traders spread across various locations.

4. Limited Resources: Government statistical agencies in many African countries may lack the resources, both financial and human, to conduct comprehensive surveys or gather detailed data on traditional retail trade.

5. No Registered Address: Many retailers have no registered physical address as they operate in regions with no street names or street numbers.

6. Cash Transactions: The vast majority of transactions are in the form of cash and few records are kept of transactions.

Addressing these challenges requires an innovative approach to data collection and a specialised knowledge of traditional trade.

Frontline Research Group are Traditional Trade Experts

Steve says, “Frontline Research Group has been conducting retail census and retail audits in the traditional trade sector since the mid-‘90s.  We understand Africa because we have literally walked the streets, driven the roads and hiked the bush and have geomapped over 5 million retail outlets in Africa.

Frontline Research Group (FRG) are well known for their expertise in Traditional Trade and they are also known for having some of the most granular data on the retail industry in Africa.

“Our services go well beyond the simple provision of data as we offer a host of analytical, insightful and management services too.  We are Africa and Traditional Trade specialists and love the continent on which we work. With close to 30 years of experience we have developed an understanding of how Africa functions that goes beyond the objective analyses of data.  Our services are insightful and provide our customers with the opportunity to make effective tactical and strategic decisions,” concludes Steve

For more information or a demonstration contact Steve Johnson, Managing Director on Tel: +27 (0) 84 2000 111 or email: