Nigeria’s economy continues to evolve and market access for small and medium enterprises (SMEs) is increasingly seen as pivotal to this evolution and development.
However, despite the strategic, social and economic importance of SMEs, eight out of 10 SMEs fail within five years and over 30 per cent of SME failures are attributed to product sourcing challenges and inefficiencies like struggling to find reliable suppliers due to a highly fragmented market, financial constraints, lack of access to data, logistics challenges, and inconsistent supply chains.
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These challenges are similar to those faced by Chinese SMEs before Jack Ma founded Alibaba in 1999. Alibaba’s marketplace emerged as a solution to the above challenges, providing a platform that connected Chinese businesses with global buyers and suppliers. Nigerian SMEs are the engines that drive the Go Local revolution, positioning them for export.
The success of Alibaba was not merely in its technological innovation but also in its understanding of the SME ecosystem and the unique challenges these businesses faced. The launch of Alibaba came at a time when the Chinese economy was characterised by significant structural challenges similar to that currently ongoing in Nigeria.
With a $105 billion retail market, there are unmet needs and pressing challenges for millions of SMEs that according to the National Bureau of Statistics, have contributed about 48 per cent of the national gross domestic product (GDP) in the last five years.
The NBS estimates there are about 17.4 million SMEs. They account for about 96 per cent of businesses in Nigeria and over 90 per cent of the manufacturing sector (in terms of number of enterprises), and they are strategically positioned to create over 80 per cent of jobs.
Today, China’s economy is the world’s second-largest, with a GDP of about $18 trillion and Alibaba played a pivotal role in this transformation, demonstrating how digital marketplaces can stimulate SME growth and innovation.
According to Harvard Business School, Alibaba made China a country with countless internal barriers to trade that seemed like one market and has done more for China’s SMEs than any government policy, ministry, or bank.
China’s rise to become a global economic powerhouse was in part fueled by the success of digital platforms like Alibaba that empowered SMEs. Feegor is mirroring this trajectory with eyes set on transforming Nigeria’s SME sector comparable to what experienced by China over the past two decades.
With a vision to optimise product sourcing end-to-end for SMEs across Africa, Feegor enables SMEs to source or restock goods easily and efficiently by providing a business-to-business (B2B) wholesale marketplace where they can discover, negotiate, and buy goods directly from a vast network of manufacturers and major suppliers.
Feegor focuses on small to medium-scale manufacturers and major suppliers across local market regions, enabling them to have an online store and be discovered on-demand while streamlining the sourcing process for SMEs and offering a reliable, one-stop solution.
Read also: MSMEs need proper implementation of legal structures to sustain economic growth – LSETF
Through strategic partnerships, Feegor offers SMEs flexible payment options, efficient logistics, and access to credit through Buy-Now-Pay-Later. The company operates in the Nigerian market even though its vision extends beyond borders.
Ugonna Ginigeme(Co-founder & CEO) and his Co-founders believe their business model presents a strong opportunity to facilitate cross-border trade on the African continent in line with the African Continental Free Trade Area Agreement (AfCFTA), and in the coming years, they plan to bridge the geographical gaps and supply chain challenges between buyers in one African country and manufacturers or suppliers in another.
By addressing key issues such as market access, supply chain efficiency, and financial inclusion, Feegor is positioned to replicate the transformative impact seen with Alibaba in China. As the platform gains traction and continues to evolve, it will be exciting to see how it shapes the future of Nigerian SMEs. Still, monitoring its impact on the SME sector and its contribution to the country’s economic trajectory and the overall economic landscape will be more crucial.
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