• Thursday, July 25, 2024
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BusinessDay

International entrants force indigenous retailers to rethink strategy

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The coming of foreign brands into Nigeria’s retail scene is forcing indigenous retailers to rethink their business strategies as they strive to boost their market share in what analysts have described as an imminent retail revolution in the country.

According to Uchenna Uzo, lecturer, marketing management, Lagos Business School, who spoke at the annual BusinessDay retail conference themed: ‘Wholesale and Retail market modernization; Challenges and Opportunities’ held in Lagos on Friday, the new strategies which include; redesigning of shop outlets, branding of stores, definition of market target and even product arrangement in stores, have become imperative to their existence in the highly competitive retail market space.-Shoppers_at_Shoprite_675288970

Foreign entrants which include South African owned Shoprite, Park ‘n’ Shop, Spar, Woolworths etc have in recent times spotted a huge opportunity in Nigeria’s retail market space, leading to an aggressive expansion drive, leaving the indigenous players struggling to stay afloat.

“Since the entrant of international retail brands into the country, the local retailers have been forced to reconsider their business strategies and further more try to imitate the foreign brands, to enable them gain a fair share of the hyper market without totally eliminating their strengths,” Uzo said.

Continuing, he noted that the ability of the indigenous stores to retain their share of the market space depends greatly on how they can optimise their strengths, such as pricing and the ability of customers to bargain, adding

that some retailers such as Grocery bazaar and Ebeano are already raising the bar to appeal to the different segments of the market.

He further highlighted the need for retailers to effectively identify their target markets and choose the right products for them, if they must stay afloat in the current competitive business environment.

While experts at the forum fingered the lack of access to funds and poor infrastructure, as among the major challenges that have slowed the growth of indigenous retailers and SMEs at large, Bunmi Lawson, MD/CEO, Accion Microfinance Bank noted that Microfinance banks have made a great deal of impact on the development of SMEs in Nigeria, as they have continuously granted loans to small businesses without stringent conditions attached, thereby promoting SMEs market excellence and overall economic competitive advantage.

Lawson however explained that SMEs are usually more credit constrained than other segments of the economy, due to financial sector policy which expresses high risks inherent in lending to SMEs.

“To counter this challenge in funding micro-enterprise and low income businesses, we at Accion have successfully granted N21.7bn in loans to more than 110,000 customers since 2007 thereby promoting financial inclusion and economically empowering low income earners”, she added.

Haresh Keswani, chief executive officer, Artee Group, who argued that though the entry level barriers into the sectors have remained high, the sector holds a great opportunity even for the indigenous operators if they can effectively leverage on available opportunities.

Odinaka Mbonu