To boost the growth of its fashion industry, Nigeria can take a cue from France, where fashion and cosmetics brands are driving growth and creating jobs.
Four cosmetics and fashion firms are French biggest companies by market valuation, according to the Paris Stock Exchange. They include LVMH valued at $500 billion, L’Oreal ($238.98 billion), Hermes ($212.88 billion) and Dior ($157.69 billion).
LVMH controls around 60 subsidiaries that manage 75 brands, which are mostly fashion brands; L’Oréal is the world’s largest cosmetics company; Hermès specialises in leather goods; and Dior sells only shoes and clothing.
Nigeria’s fashion industry is still at its early stage of growth. According to data from the National Bureau of Statistics, the industry has been on an upward growth trajectory of 17 percent per annum in the past decade.
However, fashion experts have said the 17 percent annual growth shows that Nigeria is only scratching the surface as infrastructural challenges, poor distribution channels, regular power outage and lack of modern manufacturing techniques, among others, have made the industry experience slow growth.
France is leveraging good infrastructure, public export promotion and modern techniques to attract investors in the fashion space.
“The Nigerian fashion industry cannot as of yet compete with the revenue generated by the French counterparts. First of all, we have a lot of infrastructural issues in Nigeria, from irregular power supply, lack of good distribution channels, modern manufacturing technologies; all these make it hard to run businesses in Nigeria successfully, not to talk of making profit and contributing more meaningfully to the country’s GDP,” Sola Oyebade, CEO of Mahogany International and founder of Fashions Finest Africa, told BusinessDay.
“As we speak, we’ve still not mastered the art of mass production of apparels and cosmetics products in Nigeria. The quality control is not there and it becomes difficult to have the same quality across the board for all products that encourages trust and willingness to buy by not just Nigerians but the global economy,” he added.
Oyebade said LVMH, L’Oreal, Hermes and Dior are large conglomerates, while most companies in the Nigerian fashion industry are small and medium enterprises (SMEs) that have major difficulties getting access to the funds that are required to scale up.
He said in order to build a company worth billions of dollars, the country needs more billions to invest, create indigenous products on a large scale, distribute and export, adding that the average fashion company in Nigeria is funded on a customer-to-customer basis.
He said: “Generally speaking, our consumers, en masse, do not have the buying power of the average European or American consumer. This means that we would never achieve the significant sales that would make any meaningful contribution to our GDP.
“As much as we are experiencing an awakening in using locally produced projects, we are still struggling to view Nigerian-made products as luxury products.”
According to him, these French companies produce products that are viewed as luxury products. “So, people from all parts of the world pay more to own an Hermes bag than they would a locally made bag.”
“I would say that maybe a very few people will buy a Nigerian-made product that’s as expensive or more expensive like the products produced by these French companies but the number is so miniscule that it doesn’t make a difference, at least not yet,” he added.
Lexy Mojo-Eyes, founder Legendary Gold Limited, which organises The Nigeria Fashion Show and the Nigeria Fashion Week, said the Nigerian fashion is not doing as well as it should because the sector is still very young and many investors have not yet started looking at this sector as serious business.
He said: “Players in this sector are still SMEs and not big conglomerates. Bernard Arnault, who owns Louis Vuitton, Christian Dior, Givenchy, Tiffany’s, Marc Jacobs, Sephora, Fenty Beauty and so on, is today the richest man in the world with $211 billion.
“He just overtook Elon Musk. But if you have followed these brands closely, they have been there for decades and lots of huge, consented and deliberate funds were pumped into these brands over the years.”
On lessons to learn from France, he said investors should seriously start looking at the fashion and beauty industry including their value chains as the next oil and gold.
He said fashion products are daily essentials. “Everyone wears clothes and uses cosmetic products daily. So, this shows you the economic viability of these sectors.”
Ronke Ogunwusi, founder of Africa Fashion Week Nigeria and London, said Nigeria needs a lot of collaborations and alliances, as this will enable the fashion industry to expand its reach far and fast.
She said the cosmetics and fashion businesses in France have the backing of investors who have seen the vast potential in the fashion and cosmetics industries and have invested hugely in it and this in turn has contributed immensely to the growth of the country’s economy.
She said: “The owner of LVMH brand, among other brands, has no experience in fashion or cosmetics but saw an opportunity and invested and it has benefitted the growth of the economy.
“Right now, our African Adire fabric is becoming a global fashion statement and if we position it well as a non-oil export, it can contribute to the growth of our GDP enormously and reduce poverty and create wealth; and this one of the reasons why His Imperial Majesty, the Ooni of Ife, set up a free adire textile training hub in Ife for women and youth.”
She said most of the French brands have been around for decades and have stood the test of time because consumers trust them, “That is why brands like LVMH acquire more brands to add to their portfolio, like Tiffany and Co that is being acquired for $15.3 billion.”
Lannre Da-Silva, founder of LDA fashion label, who cited data from the Nigerian Export Promotion Council, said the fashion sector accounts for 37 percent of e-commerce revenues in Nigeria.
Read also: In race to close knowledge gap, Mykmary unveils fashion business school
Da-Silva said his findings shows that fashion including textile and footwear sub-sector is a major contributor to Nigeria’s Gross Domestic Products. “Perhaps, we are underestimating our industry, and the progress we are steadily making.”
She however hinted that France’s fashion industry has remained the economic powerhouse of the country because France is a highly developed social market economy with notable state participation in strategic sectors and the world’s seventh-largest economy by nominal GDP.
She said: “France is big on public export promotion strategies as it cuts across many export and potential export firms thereby having a great impact on the national and international economies.
“The public export promotion sub-sector is an important employer of labour. Among the western economies, France has one of the most organised, ambitious, and professionally structured public export promotion strategies. This enables France to rank in fourth place among the major exporting nations of the world.”
Da-Silva said Nigeria’s export economy can draw several lessons from realities about export economies and international markets.
“The policy makers in Nigeria should consider constructing future export promotion policies on three virtues: professional competence, intellectual ability and skill in strategy,” she added.
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