According to Kasi Insight's Retail Demand Index, the overall demand for financial products in South Africa experienced a decline, dropping from 0.14 to 0.12 in 2023, marking a decrease of two points. This dip in demand was primarily driven by a 5-point decrease in the demand for investment products. Both loan and insurance products also witnessed a slight drop, each decreasing by one point. However, amidst this overall decline, certain financial products showed more stable demand. Both mobile money and credit card services demand remained unchanged, indicating consistent interest from consumers. On a positive note, there was a slight uptick in the demand for savings accounts and day-to-day banking services, with each experiencing a one-point increment in their demand.
These figures are based on Kasi Insight’s Retail Demand Index, which measures consumer demand for retail category and provides insights on how consumer habits impacted demand for various categories. The index ranges from + 0.25 to -0.25. An index level close to 0.25 means demand is high as more consumers are looking to purchase while an index level close to -0.25 means demand is low.
High income earners solely driving demand for investment products.
High-income earners stand out as the primary driving force, with their demand remaining steady at 0.18 points. Their consistent interest in these financial products has had a significant impact on the overall market dynamics. Conversely, mid-income and low-income earners present a different narrative, experiencing a significant downturn in their demand for Investment products, with each segment witnessing a decline of 5 points. The reasons behind this decline could be multifaceted, stemming from changes in economic conditions, shifting financial priorities, or external influences affecting their investment decisions.
Opportunity for investment brands to leverage high income earners.
With high-income earners displaying a consistent and unwavering interest in investment products, businesses operating in the investment sector have a golden opportunity to concentrate their marketing efforts on this lucrative segment. By tailoring marketing strategies that precisely address the distinct needs and preferences of high-income earners, brands can expect to yield significantly better results. Capitalizing on this strong demand from affluent clients can lead to heightened brand visibility, increased customer acquisition, and improved overall performance in the investment space.
However, it is crucial for businesses to take note of the notable drop in demand among mid-income and low-income earners. This decline signifies potential challenges in these segments, necessitating thoughtful consideration and strategic planning. One approach to address this situation involves diversifying investment offerings to cater to a more extensive range of income levels and risk appetites. By broadening their product portfolio, companies can attract a diverse clientele and remain resilient even during fluctuations in market demand.
To stay competitive in an ever-evolving landscape, businesses must embrace innovation and be prepared to introduce new investment products that resonate with the changing preferences of their target market. Understanding the underlying reasons behind the decline in demand among specific segments is crucial, as it can provide invaluable insights for the development of targeted and appealing investment products.
Contact our team today to explore how our consumer intelligence can empower your decision-making process. Win with confidence with Kasi insights https://www.kasiinsight.com/thehub
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