Nigeria’s future of modern retail is promising, says Sun-Basorun
Ade Sun-Basorun, chief executive officer, FoodCo Nigeria, has said that the future of modern retail is promising in Nigeria.
This is also as he charged operators within the Nigeria modern retail sector to brace up to the rapidly evolving dynamics within the ecosystem in order to remain viable.
Sun-Basorun, who made the call, noted that even though the industry recovered from the impact of the COVID 19 pandemic, it has had to contend with a world changed by a global economic contraction, significant supply chain disruptions and digitalization which has transformed the nature of consumer behaviour and accordingly business forever.
According to Sun-Basorun, the transformations have led to a number of trends within the industry which include; the commoditization of products, democratization of technology and the explosion of brands.
He said: “All across the globe, retail has been going through fundamental changes. Depending on the category and country, the pace, severity and impact of the changes has varied and we foresee that it will continue to accelerate into the future.
“For instance, there has been a dramatic increase in manufacturing efficiency across a vast majority of the consumer goods space.
This has led to a surplus in some categories which is exceeding the consumers’ ability to consume. Think for a moment about how many T-shirts, water and bread brands are available today in contrast to what was prevalent 10 years ago. The minimum efficient factory scale, cost of production, access to capital and access to expertise have significantly increased global and local manufacturing capacity.
“The ripple effect of this is an explosion of brands; a broad diversity of brands such that retailers may even find it complex to stock the right assortment of products across different categories.
The COVID-19 pandemic and its disruption to the supply chain introduced a short-term trend, making the scarcity of products an issue in various categories once again. However, as the recovery from the pandemic continues, we are most likely to revert to the long-term trend.
“Additionally, we are experiencing several digital revolutions going on within the space – from the growing penetration of eCommerce to rapid adoption of social commerce across a variety of channels.”
Sun-Basorun further called on operators within the sector to consistently innovate their processes around technology in order to serve customers faster, cheaper, with higher quality and less friction.
“The outlook for the industry in Africa and Nigeria, in particular, remains positive.”
According to the McKinsey institute, Africa’s household consumption is expected to grow to $2.3b between 2020 to 2025 with Nigeria expected to contribute an estimated $96trillion.
A significant chunk of that spend will be done by the country’s emerging consumer class who crave the convenience, quality assurance, competitive pricing and all-round experience that only formal retail can deliver. So, the opportunities to scale modern retail in Nigeria and indeed, Africa, are bountiful.
“However, as players, we must continue to reinvent ourselves and adapt to the evolving trends in order for the sector to remain sustainable into the future.
FoodCo is a leading omnichannel retailer in Nigeria with interests in supermarkets, restaurants, manufacturing and entertainment. The company was recently named among fastest growing companies in Africa by Financial Times,” Sun-Basorun added.