As the first social generation to have grown up with access to the Internet and portable digital technology from a young age, members of Generation Z have been dubbed “digital natives” (Source: Wikipedia)
With the pandemic, Gen Z investors have been an active digital investing community in the UK.
Equiniti’s EQ’s Shareholder Voice research showed that over 25% of UK Gen Z investors ranked perks and discounts as the top three reasons for buying shares in a particular company.
This seems like an innovative way to grow loyalty from an emerging investor class. Gen Z investors have easy access to investing through digital apps and ARE being targeted by listed companies with perks to promote loyal investors.
Is this, or could this retail investor targeting phenomenon, be a strategy for listed African companies in African markets?
Gen Z investors are absent in African markets as an identifiable investing community. They do not have the same easy access to online and mobile investing, nor the disposable income to invest. They are not being targeted by listed companies as specific communities to target.
They will be.
But not yet.
According to Statista, Africa is the continent with the youngest population worldwide. As of 2021, around 40 per cent of the population is aged 15 years and younger, compared to a global average of 26 per cent. Although the median age on the continent has been increasing annually, it remains low at around 20 years.
Extrapolate the current African population to 10-15 years hence and a vast retail investor community is set to emerge. Digital trading platforms will emerge too, as a result, and listed companies will become more aware of the value of targeting Gen Z and other retail investor demographics.
What about other retail investor targeting opportunities?
The relevance of present-day retail investor strategies for African listed companies depends on
🦒 the nature of the business of the listed company
🦒 the value of services or perks that could be provided to retail investors
🦒 the number of retail shareholders
🦒 the extent to which retail investors can be identified and targeted successfully
🦒 the practicability and materiality of benefits (to both issuer and investor)
🦒 the strength of connection with retail investors
Watch this space.