The retail industry in Nigeria is one that has witnessed strong growth within the last five years and industry watchers are speculating more growth in the coming years with the entrance of online retailers such as Jumia, Konga and Sabunta. The industry currently valued at about N7billion annually is yet to receive any real boost or support from the government in terms of structure or investment. Analysts predict the much-needed boost may come from international investors who see the potential in the industry by virtue of the large market size.
“As Africa’s largest consumer market, Nigeria is very attractive for foreign retailers and investors”, says Tomiwa Idowu, a business strategist and Managing Partner at Hudson & Idowu. He explained further that, “the market is very large and there are not even enough participants. I know a number of foreign retailers preparing to enter into the market in the coming months.” When asked about how Nigerian brands can compete favorably against the foreign ones, he responded, “Nigerian brands need to be more local in order to really connect with their customers, a lot of local brands look at international brands and try to replicate what they are doing internationally, often forgetting the market is very different. The British are coming, the Americans are coming, the French are coming, and I just hope the Nigerians are ready.”
Jumia, the online retail giant led by Dotun Kehinde has created a platform whereby consumers can order goods from the comfort of their homes with the option of paying online or paying in cash upon delivery. The company received funding from international investment bank JP Morgan in 2012 and has since entrenched itself deeper in the Nigerian retail industry. It currently delivers only within Lagos but is set to expand to other states in 2013.
Okunoren, the leading indigenous clothing company in the country is said to have also received some funding from private international investors in 2012 as it diversified across the value chain, creating subsidiaries Industrial Tailoring & Co and The Shirt Company. The company well known for it’s bespoke suits, which cater to the high echelon of the society and worn by business moguls such as Tunde Folawiyo, Wale Tinubu and former Vice President Atiku Abubakar recently entered into a partnership with online retail giant, Jumia, to stock its ready-to-wear line which is targeted at the average Nigerian and is much more affordable. The line will also be stocked at its soon to be opened flagship store in Ikoyi, where customers can walk in and pick up a ready made suit as is the custom abroad.
Another brand doing extremely well financially is Tiffany Amber, a high-end womenswear label run by Folake Coker. The brand has its flagship store at the Palms shopping mall and other stores around the country. Known for its flowing tunics and gowns, it enjoys high patronage from top businesswomen and working class individuals in need of unique, quality designs. Some of its clientele include oil barons Folorunsho Alakija, Bola Shagaya and Senator Florence Ita-Giwa. Tiffany Amber is a strong fashion brand across Africa and has staged various shows internationally in New York and London.
Nigeria, Africa’s largest consumer market needs to develop a working structure for its retail industry in order to fully realize the existing potential and outstrip South Africa from its leadership position on the continent. The government has lifted the ban on importation of textiles and this has created a huge opportunity for major Dutch manufacturer, Vlisco, which was acquired by Actis, the Africa focused private equity firm for $151million in 2010. Vlisco has opened several outlets in Nigeria selling various brands such as Wooding, GTP and Uniwax, it continues to witness strong sales; its 2011 net sales were put at $292million up from $247 the previous year.