Players, big and small, in Nigeria’s retail industry have no option but to adopt a raft of disruptive technologies to stay relevant in the big, booming demography.
One would think that in the constantly variable world of retail consumption, where products on demand fly off the shelves in the blink of an eye, the founder of a fast-moving consumer goods (FMCG) company of considerable repute might also be constantly on the edge, surrounded by MIS reports and product presentations.
Yet, there is an air of calmness when one steps into the office of Peeyush B. Garg, the founder and chairman of Daraju Industries. Daraju, whose flagship products MYMY and Extreme brands of toothpaste are patronized by millions of Nigerians every day, has built a reputation of being the product of choice for the country’s low-income consumers as well as the middle class.
It augurs well for a company that started trading less than a decade ago with a vision to become a leading household and personal care manufacturing company.
From his office in the bustling business district of Ladipo, Garg has built his company, brick by brick, from the ground up, in Africa’s most populous economy. After recently closing a round of capex investment with African Capital Alliance (ACA), to expand its portfolio of products, the company is set to continue its growth across Nigeria and beyond. In an uncertain economic climate, Garg is looking to capitalize on the booming population growth in Nigeria.
“The FMCG market in Nigeria is very competitive especially in the home and personal care space where you have so many competing products. We are at the early stages of what we seek to achieve,” says Garg.
According to the Nigerian Economic Outlook 2019 report by PricewaterhouseCoopers (PWC) in Nigeria, the country is projected to add another 200 million to its 190 million population, and expected to surpass the United States, currently the world’s third most populous country, by 2050.
It is expected that depressed oil demand, along with a reduction in production supply and variations in price, will impact the Nigerian economy’s growth trajectory.
Add to this the short-term uncertainty usually associated with the pre and post-election cycles in the country, and you have a retail industry that is currently marred by a number of challenges.
Changing consumer preferences, with increased competition from agile new entrants and a spurt in e-commerce trends, have all led to a transformation in the way consumers buy and companies, now more than ever, need to stay abreast of the shift if they want to remain relevant in the foreseeable future.
“We have seen a change in the retail space over the past couple of years. The growing shift to e-commerce is expected to trigger a slide in physical retail footprint in terms of the number of stores and their sheer size and that is an area we are also investing in for the future,” says Garg.
The disruption Garg alludes to in the retail industry is all-pervasive.
The challenge now is how retailers differentiate themselves in the marketplace, causing the metric for success in retail to move from brand-centric to customer experience per square foot.
One retail entrepreneur who understands this new trend quite well is Adewunmi Williams, a self-proclaimed retail specialist, with a fervent belief in developing the retail industry in Nigeria.
After studying retail management at the University of Surrey, United Kingdom, she joined retail giant, Nordstrom, in Atlanta, US, where she worked her way up from an intern to team-leader and finally to location manager of the prestigious brand. In 2015, she launched Nakenohs Boulevard, a fashion and lifestyle mall situated in the heart of Ikoyi, a wealthy suburb in Lagos.
“Over the next couple of years, I believe success in the retail sector will be driven by a deep understanding of and connection to the empowered customer. The retailer’s ability to adopt disruptive technologies and business models, both offline and online, will determine how successful retail brands are,” says Williams.
The challenges in the retail sector was also bolstered by the foreign exchange (forex) crisis, which was largely the result of the falling demand for the naira from foreign buyers of Nigerian oil and gas, which accounts for a significant balance of payment for the government.
In 2017, the Central Bank of Nigeria (CBN), proceeded to cut about 680 categories of items from the list of those it would provide forex at the official rate, forcing retailers to secure US dollars through the black market at a much higher exchange rate. That coupled with declining sales meant a number of international retail brands no longer saw Nigeria as an attractive market.
“Woolworths exited the Nigerian economy. Reason: high cost of rent, taxes and supply-chain management. Then, clothing retailer Truworths International of South Africa followed in February 2016, citing a struggle to stock its outlets and manage the forex challenge.
“Many of the items subject to the CBN’s import controls like textiles, clothes and woven fabrics as well as glassware and utensils, affect the retail sector making it more expensive to stock these products,” says Bismarck Rewane, a renowned economist in Lagos.
Furthermore, the Nigerian economic environment post the February 2019 elections has led to further uncertainties in the retail sector.
As digital becomes increasingly important, the connected consumer today demands instant gratification, leading to a number of technological innovations that retail brands need to adopt in order to meet this change in demand.
“Technologies like the Internet of Things, drones, 3D-printing and blockchain will disrupt the industry in the next 10 years,” says Steve Harris, a Lagos-based business coach and consultant.
Subsequently, the traditional brick-and-mortar retail system, which accounts for almost 90% of retail activity in Nigeria, has continued to decline due mainly to the growth of e-commerce platforms. Jumia is a unique illustration of how Nigerian consumers are increasingly preferring online shopping over visiting physical stores.
Founded in 2012, Jumia leveraged technology to deliver innovative, convenient and affordable online services to consumers. The company is currently present in 14 African countries with more than 81,000 active sellers transacting online businesses with millions of consumers.
In April this year, the company listed on the New York Stock Exchange (NYSE) with many hailing them as the first African tech startup to list on the platform.
“Jumia is an exception in the e-commerce space where we have seen several brands like Gloo.ng, Efritin and OLX close down over the past couple of years. The problems here are two-fold, partly due to the recent recession in Nigeria and secondly, logistical challenges that exist in the country,” says Kwame Opoku, an award-winning futurist.
“Most e-commerce platforms operate a payment-on-delivery model where customers only pay for their goods once it is delivered to them. The problem is, most of these platforms spend a lot of money hiring drivers who end up not being able to deliver the products because customers refuse to pick up their calls or they simply cannot find the address.”
Inspite of all these logistical challenges, some experts believe the Nigerian e-commerce industry is still the way forward. With a valuation of about $16 billion, there is certainly a reason to keep striving for a more efficient logistics solution.
Leo Stan Ekeh, founder of Zinox Technologies, which recently acquired e-commerce giant Konga, is hoping his experience building the first Nigerian indigenous computer company will help him to succeed where his predecessors failed.
“We hope to combine forces through this merger with Yudala [e-commerce site owned by Ekeh] and Konga in order to help us achieve our accelerated growth projections and transform the retail ecosystem in Nigeria through technology.
“I think companies that adopt the right technology in their value chain will ultimately stand a greater chance of success and that is a key area we are investing in,” says Ekeh.
Then we have the influx of new entrants who are taking advantage of social media platforms to build their retail brands.
“We sell online because we believe it is the most efficient way of reaching our customers.
“Social media platforms like Instagram have really helped to break down the traditional barriers like a physical store which means you are paying about two years rent up front in Nigeria before you even begin to make a sale,” says Gbemi Olateru-Olagbegi, founder of Gbemisoke Shoes.
The company carved a niche in the competitive footwear market by providing shoes for women with big feet.
“We plan to continue to take advantage of the digital transformation that is taking over the Nigerian retail sector at the moment.
“The country’s middle class is at scale and fuelled by rapid expansion in banking and telecommunications, the retail sector has a lot of opportunities for brands like mine that are willing to be innovative to succeed,” says Olateru-Olagbegi.
For now, technology and innovation are clearly the buzzwords for retail in Africa’s biggest and most populous economy.
Get Set Mo!
Morongoa Mahope feeds her love for extreme biking with petrol and adrenaline. The funds for her pet passion come from her nine-to-five accounting job.
About 10kms north of the Kyalami Grand Prix Circuit in South Africa is another racetrack, where superbikes and sports cars are noisily revving up their engines, getting ready for a practice run on a cold Wednesday afternoon in Johannesburg.
At first glance at the Zwartkops racetrack is a melange of male drivers and mechanics.
But also revving up a superbike, the one numbered 83, is Morongoa Mahope from Mahwelereng in the Limpopo province of South Africa.
She is about to clock 270kmph on her black bike, tagged #Mo83 in pink.
When she is not burning rubber on the racetrack, Mahope is an accountant working for an advertising agency in the city.
“When I started [superbiking], it was mainly only for leisure because I love the sound bikes and cars make. I’m a petrol head and just wanted it to commute to work,” she says.
Her journey started in 2013 when she convinced her husband and family about buying a superbike. Her family was initially apprehensive and viewed superbike racing as dangerous.
Her husband finally relented and Mahope went for a day’s training to see if she really would be interested in the bike before investing in it. The 36-year-old sports fanatic succumbed, and indeed pursued her wish.
“I still have my first bike; it’s a green and black Kawasaki Ninja 250cc. I was just using it to [go to] work until I met a biking club, the Eagle Bikers Club Limpopo,” she recalls.
Mahope was riding with the club, doing breakfast runs between Johannesburg and Limpopo; but, in 2015, they took a trip to Nelspruit in the Mpumalanga province of South Africa.
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Navigating the mountainous, curvy roads, Mahope was overtaking men with her small 250cc bike at the bends.
She was then goaded by her fellow riders to try the racing circuit.
“I went to the track and met a superbike racer; Themba Khumalo, and I started following his journey. I spent more time on the track, practising so I could start racing in 2016. The love for the sport was getting deeper and deeper,” says Mahope.
Khumalo, a professional superbike rider who has raced in the European Championships, says he met Mahope at Zwartkops and it was her first time at the track, and she was quite fast at the corners.
He went up to her to introduce himself because it was rare to see a black woman on a racetrack.
“I then took her through the fundamentals of racing and the basics; the type of bike she would need and the equipment. I could see how committed she was and how quick she was learning, and her lack of fear. She was going farther than where she was,” says Khumalo.
However, her male counterparts were not impressed with her pace on the track; they remarked negatively about her. But Mahope didn’t let the minimizing comments derail her mission.
Unfortunately, Mahope was involved in an accident during training on Valentine’s Day in 2017 and fractured her clavicle before her first race. That took her off the bike for six months.
She joked about the incident with friends, but they persisted and told her it’s an unsafe sport. That encouraged her even more; she wore her helmet and gloves, clocking higher speeds than ever before on her superbike.
Indeed, it was a learning curve. A few months later, she was invited to Bulawayo in Zimbabwe to race.
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Her first official race was the same year as the injury; it was a club race in Delmas, Mpumalanga, at the Red Star Raceway. She had never been on the grid nor practised how to stud, but for her, it was more about the experience despite the shivers and nerves.
“I finished the race and I was second last. It’s part of how you start but you will improve to be better. And now, I have lost count of the races I have competed in,” she says.
Mahope is racing in the short circuit series for women who use the 250cc, being the only black woman to participate. She also participated in the Extreme Festival tour series, a regional race in which she used her Kawasaki Ninja ZX600cc, racing men with bigger and louder bikes.
“I am the first black woman to be in the grand prix and the challenges that I faced were having to teach myself a lot of things. I had to learn how to ride on the track, the speed, the decelerating, all was new to me. I wasn’t helped.”
Mahope started at a late stage with the sport, and had to put in more time and effort in a short period to get to where she is currently.
Today, she assists women who are starting with the sport.
Sadly, in South Africa, there is no national league for women to race and represent the country despite finishing in the top three in the 2019 races.
With all her achievements thus far, Mahope’s salary sustains her motorsport passion.
“Racing is very expensive; the more you practise, the more you get better and the more you spend money. On practice day, I spend about R3,000 ($206) and would practise twice a week at different tracks. In total, I would spend R18,000 ($1,235) a month for the track excluding the travel costs to the track and race day,” she explains.These costs cover tyres, fuel and entrance to the tracks.
A sum of about R40,000 ($2,744) can get you geared up for the bike and track.
It just shows this daredevil accountant can balance both the books and the bike.
Africa’s Most Dynamic Thought-Leaders, Industry Game-Changers And Icons Of Social Activism Set To Feature At The Exclusive FORBES WOMAN AFRICA 2020 Leading Women Summit
Africa’s most dynamic thought-leaders, industry game-changers and icons of social activism are set to feature at the exclusive FORBES WOMAN AFRICA Leading Women Summit presented by Mastercard (#LWS2020KZN) and hosted by the KwaZulu-Natal government – taking place at the Inkosi Albert Luthuli ICC Complex in Durban on Friday, 6 March 2020.
For the 5th edition of this globally-renowned event, panellists and speakers will engage with the impactful 2020 theme, ‘The Ceiling Crashers 2.0: Power with Purpose’. The day’s thought-provoking discussions will be followed by the highly-anticipated FORBES WOMAN AFRICA Awards Gala Dinner which celebrates the continent’s most influential female ‘ceiling crashers’ across a number of key categories.
“The FORBES WOMAN AFRICA Leading Women Summit has grown to become one of the biggest female-empowerment events, boasting a high calibre of attendees and unparalleled speaker line-up,” said Renuka Methil, Managing Editor of FORBES WOMAN AFRICA.
“This promises to be the biggest instalment yet, featuring female pioneers and path-breakers across the continent. Audiences will be exposed to dynamic discussions about the growing the number of women in leadership – something government and business really need to factor into their strategies. We will also get to grips with a new discourse that focuses on dismantling power structures and the need for truly inclusive cultures in business and society.”
This highly-anticipated event, which is hosted annually in honour of International Women’s Day, is expected to draw an audience of around 1 000 leading women. Through hard-hitting talks, fireside chats and insightful panel sessions centred on ‘ceiling crashers’, attendees will be inspired to make meaningful changes within their own industries, secure in the knowledge that they have the support of these innovative allies. This year’s programme promises an influential mix of leaders in healthcare and business; advocates of social and environmental activism; award-winning artists and internationally-renowned stateswomen.
For the first time, FORBES WOMAN AFRICA will be releasing its own list of ‘Africa’s Most Powerful Women’, many of whom will be attending the summit. The list will be published in the March issue of the magazine, outlining those who have been leading ideas and industries while purposefully contributing to nation-building and positively impacting the lives around them.
The FORBES WOMAN AFRICA Awards Gala Dinner, which is hosted the evening of the summit, is an opportunity to recognise the trailblazers and role models who have created a new narrative within their industries. By challenging authority and ‘old school’ traditions, they are enabling future generations to live in a better and more equal world.
Beatrice Cornacchia, Senior Vice President, Marketing and Communications, Mastercard Middle East and Africa, said: “African women are a vital source of innovation, prosperity, and economic growth. Yet inequality and exclusion still hold women back in many aspects of their everyday lives – from growing their businesses to having the financial tools to participate in the formal economy; from joining the C-Suite to following their passions. We are proud to partner with FORBES WOMAN AFRICA as we believe that it is only by bringing diverse perspectives to the table that we can unlock Africa’s possibilities to women.”
Managing Director of the ABN Group, Roberta Naicker, said the organisation was excited that the KwaZulu-Natal government would, once again, play host to this illustrious event, which serves to highlight the continent’s most influential female leaders while also shining a spotlight on this beautiful region. “A summit of this calibre showcases that KZN is being positioned as a world-class events’ destination. We are excited to have renowned speakers and attendees will get the opportunity to engage on hard-hitting issues during the summit, while also affording them the chance to enjoy the many recreational tourism sites and activities for which KZN is renowned.”
Tickets to the exclusive 2020 FORBES WOMAN AFRICA Leading Women Summit and Gala Dinner are available at a cost of R3499, available through Webtickets (https://www.webtickets.co.za/v2/event.aspx?itemid=1496991848). Tickets are limited and interested parties are urged to book early to avoid disappointment. There are also select opportunities to get involved with the event sponsorship, exhibiting at the on-site marketplace or by sponsoring a mentee. Please visit website for further details.
The 2020 FORBES WOMAN AFRICA Leading Women Summit is presented by Mastercard (@MastercardMEA) and hosted by KZN Provincial Government (@KZNgov). Keep updated on all the latest news and announcements on Twitter @LWSummit and join the conversation using the hashtags #LWS2020KZN #DOKZN.
Office: +27 (11) 384 0300
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Higher Revenues And Greater Optimism: Female-Owned Small Businesses Are Gaining Ground
The momentum is strong for U.S. female-owned businesses. So strong, according to Sharon Miller, Bank of America’s head of small business, that “this was the first time in four years where we found that women were actually more optimistic than their male counterparts around their hiring outlook, their revenue prospects and their growth.”
Miller’s evaluation stems from a 2019 Bank of America report that surveyed 1,323 small businesses, 524 of which were owned by women. The businesses had annual revenues ranging from $100,000 to $4,999,999 and between two and 99 employees. Its main goal was to assess the current climate for female entrepreneurs across the country.
Eighty-four percent of the female business owners surveyed—most in the consumer products, professional practices and personal services industries—expect year-over-year revenue growth, according to the report, and 73% of them plan to expand their businesses, in contrast with only 66% of male business owners who have expansion plans.
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“We’ve seen more success across the board with women, and women can identify with other women,” says Miller. “When you can see someone else—their success and that they’re like you—I think it just goes well for confidence.”
Miller highlights the importance of business owners identifying with people who look like them, but the Bank of America report does not break down numbers by background or ethnicity.
But a similar report by American Express does exactly that. It finds that the number of women-owned businesses grew 21% from 2014 to 2019, but those owned by women of color grew at double that rate (at 43%). For black women, specifically, businesses grew even faster—by a rate of 50%. It’s the first time the report took into account part-time entrepreneurs, according to American Express senior vice president Courtney Kelso.
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“In some cases, women of color are starting these businesses out of necessity—because they are struggling to find jobs or need to supplement their incomes—or because they want flexibility because they have caregiving responsibilities,” says Kelso. “Also, increasingly women of color may be testing a business idea while holding down a job or seeking a creative outlet or an additional challenge.”
While the two reports points to great strides for women-owned businesses, Liz Sara, National Women’s Business Council (NWBC) chair, thinks that it also speaks to “some of the major challenges that we’re trying to overcome to make it easier for women.” One major problem that persists: raising capital. In fact, according to Bank of America’s report, more than half of female entrepreneurs say they do not have equal access to capital.
To help combat this, NWBC has been working with members of Congress to implement an angel investor tax credit that would act as an incentive for individuals to support local women-owned businesses in their community.
So far, Sara says, the proposed tax credit seems to be gaining momentum. And given the fact that female founders raised just 2.3% of the total venture capital funding in 2018, the tax credit would be one small step toward closing the venture capital gender gap.