Many foreign retailers are setting up businesses in Nigeria to gain a firm foothold in a marketplace where most consumers are brand loyal and value good services. TONIA ‘DIYAN reports.
Within the global business community, Africa is believed to be the last frontier for proper growth, which is why global attention is focused on Nigeria, the most populous country in the continent.
With an estimated 167 million population and huge market, foreign investors can no longer ignore the huge investment opportunities in Nigeria, considering the fact that most consumers are brand loyal and discerning; they value good services and products. These, perhaps, explains why many foreign retailers see Nigeria as the investment destination of choice and are, therefore, rushing to have a foothold in a marketplace that offers tremendous opportunity for bountiful return on investment (RoI).
South African retailers are leading the pack of foreign investors who have seen the profitable opportunities in Nigeria’s retail market. South African retailers have since been notching up exceptionally strong trading in shopping places where they are situated in Nigeria. These South African retailers, it was learnt, carry out researches to understand the unique set of consumer needs and norms before venturing into the business.
In doing this, the retailers from the Rainbow nation, as South Africa is called, recognise that there is more brand recognition for foreign retailers in Nigeria that requires a marketing strategy that goes beyond advertising, store opening and extends to launching a new brand, which has continue to make them seek opportunities in the market.
A South African clothing retailer, David Botha, is one those that ventured into the retail business in Nigeria and has since been counting his blessings. Botha entered into Nigeria a few years ago with the hope of using the country as platform to expand the frontier of his retail business headquartered in South Africa. Today, the foreign retailer is more satisfied doing business in Nigeria than in South Africa or any other African country.
Botha has since brought his world-class retail store with all the international standards, guarantees and returns policies attached to his products to Nigeria. Having done his feasibility, he understands that Nigerian consumers are hungry for quality and innovation, which is why he provides the latest international fashion at affordable prices and in trendy/stylish stores situated across the country.
As pointer to the profitability of retail business in Nigeria, many retailers who started with one store have opened several others within a short period of time, as new shopping complexes owned by foreign nationals keep springing up in the country every now and then.
For instance, Mr. Botha told The Nation Shopping that he already has four stores in the country and will be opening new ones as soon as he finds space. “I started out with one store in Ikeja City Mall in Lagos, opened another one in Surulere, within Lagos. In my second year of doing business in Nigeria, I opened another store in Heritage Mall in Ibadan, as well as in the Grand Towers Mall in Abuja,” he disclosed.
More than anything else, it is the innovation that the foreign retailers brought to bear in the business that ensured their expansion. Some of them who spoke with The Nation Shopping say they are committed to learning how they can improve on the way they do things to make current and future customers’ shopping experience as enjoyable and rewarding as possible. “We are not simply copying what we do where we are coming from, we are customizing our business to suit the needs of Nigerians in the various regions in which we have stores,” Sander Norman of Ikeja City Mall, said. Constant research into the needs of customers is believed to be partly responsible for the rapid growth of retail business in Nigeria.
The success of these foreign retail businesses is also attributed to the passionate and dedicated efforts of the staff, which is why the retail owners invest heavily on staff development and training. As the investors acquire more stores, they hire more staff and develop them strictly from within.
“We make use of an organic growth model, whereby we largely promote staff members from within our business. There are numerous staff members who hold senior positions now, who began their working career with us as casual employees,” Botha said.
Expectedly, the coming of the foreign retailers has rubbed off on the local economy. Apart from continuously investing more capital into their businesses, which contributes immensely to the growth of the local economy, the investors have also been contributing greatly to employment generation across the country. Most of their businesses are run by Nigerians. Sander confirmed this much when he said that apart from employing Nigerians, foreign retailers regularly take Nigerians for training in other countries and are often excited by the fantastic potential of the team members. “We promote our business from within and we have only one expatriate who will be replaced by a Nigerian by the end of the year,” he said.
With experts projecting that in a few years time, many more retail shops and new shopping malls would dot Nigeria’s retail business landscape, the spin-offs to the local economy are expected to increase. More foreign investors in the industry will want to be part of the current growth and there will be many opportunities for local entrepreneurs to develop new store brands and different types of entertainment offerings, restaurants and fast food businesses.
New foreign stores will enter Nigeria and will result in various retail-related job opportunities, as well as prospects to supply such stores with all the various services they will require. Also, experts have said these retailers will provide one-stop-shops for people to browse while doing their shopping, as well as meet their friends and families, and also enjoy themselves during their free time.
Part of the innovation the retailers would bring to the table is to ensure that new items reach their stores weekly, thus ensuring that customers always have the freshest, latest items available when they visit the stores. The thinking is that foreign retailers who wish to make impact in the market where consumers are known for their increasing sophistication and taste must customise their models to meet the unique consumer needs and aspirations because mall dwell times are increasing and foot counts are growing.
Nigerians enjoy a first-world shopping environment that is pleasant, safe, cool, unrushed and which offers a complete retail experience from shopping to relaxing at the food court. That is why the call for more foreign retailers is gaining the support of more shoppers.
Sander has a piece of advice for retailers planning to enter the market: “If you are prepared to develop a country-specific model and invest in research to support a supply chain, get the right stock, provide the best price and render the best services, because there’s a bright future in Nigeria.”
