Nigeria Retailers: Set For A New Dawn
Overview of The Nigeria Retail Market over 2020
The Nigeria retail sector continues to be a gold mine and the new growth frontier for local and international investors and retailers in Sub-Saharan Africa favoured by a mix of favourable fundamentals and positive forecast. The retail market accounts for 16 per cent of Nigeria’s Gross Domestic Product driven largely by a market of over 200 million, a growing middle class with spending power and rising urbanisation estimated at 4 per cent per annum, one of the fastest in the world. The sector is predicted to holds a growth opportunity of about $40 billion by 2020 according to a report by McKinsey and Company
But, despite these favourable fundamentals and positive forecast, the Nigeria retail market is under pressure with retailers struggling with under-performance due to poor retail models and business structures, steep competition particularly from new and … new entrants, a lack of critical consumer mix, poor access to data occasioned by poor data gathering, analysis and insights, poor access to funding and poor infrastructure, poor staffing, poor investment in capacity building… As a consequence for instance, there has been a trend of decreasing the size of future shopping centre developments in the current market, a trend of decreasing store footprint and the size of future stores which are ways in which the market has recalibrated to cope with market relating to an economy that is struggling post-recession.
So, the question still is: How can we make the retail sector more competitive and rewarding to investors and retailers while also contributing more to GDP? How can we increasingly transform the fortunes of stakeholders, and in particular retailers in the sector?
The Tide is Turning for Nigeria Retailers. The New Dawn is Here!
The tide is set to turn for retailers operating in Nigeria over 2020 and there remains a huge opportunity for significant growth notwithstanding our many challenges. The New Dawn is Here!
While it is true that Nigeria’s recent economic troubles have had an impact on the immediate prospects for retailers, these challenges do not weaken the long-term potential of the sector. A combination of factors accounts for this optimistic view of the retail market in Nigeria – the size of Nigeria’s population of about 209 milling, growing rate of urbanisation, rising internet and mobile penetration rate and implication for ecommerce growth, and improving availability to and lower cost of credit and implication for stimulating growth in consumption over the next year. However, increasing prices and elevated unemployment continues to limit the extent to which consumption and therefore retail will grow.
Nigeria is a complex market. Despite its size, the Nigerian retail market is among the most fragmented in Sub Saharan Africa. In a country of more than 209m people, the largest retail chain still has below 100 stores! Few chains have branches in multiple cities, the traditional trade dominates retail and few key internationals to boast of.
While projections may be difficult given the inherent challenges of measuring the informal sector that constitute about 95% of the total retail market, the opportunity for significant growth remains clear with some international already waiting in the wings with expressed intentions to open stores in Nigeria. The expressed intensions of some international shouldn’t came as a surprise given the several projections and predictions about the Nigerian retail market as the new retail destination in Africa.
By 2050 for instance, Nigeria’s population is predicted to be 440.4m. It will be, by far, the single largest market in Africa and either the third or fourth largest country in the world by population in 2050. By 2025, it will have nearly twenty cities with populations over 1m people and by 2050 an additional 200m people will be living in urban areas, within easier reach of retailers and service providers. According to Nielsen “by 2025, 55% of Nigerians will live in cities or towns, and the country will experience a 50% urban growth, which would be the fastest globally.
We expect domestic retailers to grow. Also, we reasonably expect some international retailers who have been waiting in the wings, looking to enter the Nigerian retail market to make the move. We also expect to see acquisition and mergers as a gamechanger and potentially a major shakeup in the retail market landscape.
In such a scenario therefore, it becomes all the more important for retail leaders to gain the necessary insights, understand the market better and prepare to maximize the emerging market opportunities. But how will this be achieved?
Nigeria Retailers: Set For A New Dawn – There remains a huge opportunity for significant growth notwithstanding our many challenges.
The Retail Leaders Conference, TRLC 2020 (7th Edition)
The Retail Leaders Conference, TRLC 2020 (7th Edition) presents a unique opportunity to engage directly with industry experts, stakeholders and decision-makers, present the sector outlook for year 2020, demystify the many challenges faced by the sector, walk everyone through areas to focus attention and how the choices we make could affect the business and bottom line.
More importantly, it is also an opportunity to understand more about the market, the business, the consumers, as well as the possible headwinds that lies ahead to ensure that we are better prepared to successfully navigate the year 2020 and beyond
Join other retail industry stalwarts at The Retail Leaders Conference, TRLC 2020 (7th Edition) Wednesday June 24, 2020 at Eko Hotels & Suites, Victoria Island Lagos Nigeria to find opportunities with the right insights to help you beat the odds in 2020 and beyond.in a serene atmosphere of conversation and networking to gain the necessary insights to understand the Nigeria retail market better, discuss key issues that will shape the development and growth of the market in 2020 and beyond, and prepare to correctly navigate the disruptive changes and challenges and maximize the emerging market opportunities on the horizon.
The Retail Leaders Conference an annual pre-eminent gathering of retail leader is convened by Bervidson – Nigeria’s no 1 retail consulting, training and development Group.
For suggestion and participation – speaking, attendance, sponsorship, exhibition and advert booking, please contact us: info@bervidson.com
Nigeria Retailers: Set For A New Dawn – There remains a huge opportunity for significant growth notwithstanding our many challenges. Get on board.
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