Small manufacturers in the Fast Moving Consumer Goods (FMCG) subsector are taking advantage of the high level of fragmentation as they capitalize on Value for Money Opportunities (VFM) to increase their share of the Nigerian market.
According to a recent Data by Diageo, one of the largest brewers in the world, the top 5 players in the manufacturing industry that control 22.30 percent of the market saw market share fall by 3.50 percent.
On the other hand, firms that rank between 6 and 10 that control 5.50 percent of the market saw share increase by 8.10 percent while those firms that fall within the range of 31-100 saw market share increase by 6.30 percent. Speaking at the monthly Lagos Business School Breakfast Club, Managing Director, Guinness Nigeria Plc, Baker Magunda said the Nigerian consumer industry is highly fragmented with small and local manufacturers’ leveraging on value for money opportunities in the market segments. This has seen local and smaller manufacturers capture part of the market segment which was tilled now dominated by the big players.
According to Magunda, business priorities are changing because of local manufacturer influence in the highly competitive consumer market noting that manufacturers are now adapting to consumer’s needs with innovation, availability and right pricing.
The concept of value for money implies consumers are not willing to pay more for a good or service than its quality or availability. He further noted that consumers are now redefining “value” in the market space using the “3S” which translates to Switch (to a more affordable brand), Swap (choice of different package alternatives and packaging) and Squeeze (rationalize quantity and frequency of consumption).
Magunda, however, noted that despite the seemingly competitive consumer market space, companies with flexible and smart options are likely to win the heart of consumers in 2019.
A survey by BusinessDay shows that due to the rapidly worsening economic fortunes most households in the country have been forced to dump costly, premium brands in the country to cheaper and newer brands. The reduced purchasing power among consumers which is further pressurized by rising unemployment has left most household with no choice than cut spending. In response to this, manufacturers are also re-strategizing by churning out smaller sachet packaging alternatives.
OLUFIKAYO OWOEYE
