RETAIL COUNCIL NIGERIA PREACHES "ORGANISED RETAIL" AS THE WAY FORWARD FOR ECONOMIC GROWTH

The inauguration of the newly formed Retailers Council Nigeria (RCN) took place recently in Abuja with a forum organised to ultimately (and finally!) develop and grow Nigeria's retail sector. The mission behind the Council is to increase consumption, boost production, grow the economy and encouragingly, generate employment.
The forum held on November 18th 2013 featured the two Oluseguns; Former President Olusegun Obasanjo, who is the on the Board of Trustees as Chairman (of course) and Olusegun Aganga, Minister of Industry,Trade and Investment.

 Aganga identified Nigerias retail sector as a major driver to achieve wealth for West Africa's largest economy. Aganga pointed out that not only do great opportunities exist in Nigeria for new and existing investors to take advantage of but that the retail industry in Nigeria has attracted N205.4 billion ($1.3 billion) of investment. Obasanjo spoke of the government and the private sector collaborating to speed up the development and growth of the retail sector.

BusinessDay Media, who spearheaded this first ever retailers forum, conducted research prior to the forum which concluded that through "organising" retail, this would have a positive impact on other sectors such as assisting the developing IT infrastructure in the country and assisting and boosting tourism with a knock on boost to real estate and the service industries. The research also concluded that the way to successfully achieve the much needed boost to the retail industry would occur through ensuring that there is compliance in the sector to international standards including strict policing of counterfeit produce in open market trade as well as in formal retail platforms.

So what does this mean for the Nigeria retail sector? Prospectively, the RCN should serve as a key point of contact for local and international investors looking to start up or expand into areas of Nigeria. However, there is a difference between discussing ideas and actually implementing them. Nigeria, first and foremost, needs to develop the infrastructure in which the retail sector will comfortably exist and flourish, in order to attract such investors. Transport and logistic issues, dare i say it- power supply issues and security challenges are the few but huge obstacles that deter investors. If the government, perhaps lobbied by this newly formed RCN, minimise and mitigate against these issues then this would inspire potential investors to invest.

With Obasanjo as Chair and Aganga taking the reigns, one can only speculate whether this is a platform for more hot air from the mouths of Nigerians or that things may actually come to fruition.

NIGERIA;RETAIL LAND OF OPPORTUNITY.PART 2; MUSHIN LEATHER MARKET

A rainy and cooler day in Lagos in contrast to the weather on the day i visited Balogun Market. It is the day before Good Friday. My family have traveled for Easter. I am dressed ready to tackle Mushin leather market; Converse trainers, shorts and a one piece body suit. But the weather is putting me completely off.   Mushin leather market is on the other side of Lagos (I'm in Lekki) and i'm wondering if i should abandon the mission. The thought of navigating Lagos roads alone to get to this area unknown to me seems tasking...

As the hours passed, the rain persisted, I was about to lose all hope. Then at around midday my friend, the one i mentioned who had joined me at Balogun market, called me to resolve my plight. He sent his cousin to meet me in Lekki, who would then accompany me to Mushin. By the time the cousin arrived the rain had stopped also. I was very thankful! Not only that i will be sticking to the itinerary i had made for my Lagos trip but also i knew that my friends cousin would have more bargaining power regarding taxi fares and be able to negotiate better prices for what i required at the market.(see previous blog post on Balogun market)

 A two and a half hours "cheapish" taxi journey later (We set off at around 1pm. This is not advised by the way. Leave for markets early morning!) we arrived in a built up area swarming with market traders, hustlers, beggars, customers.  Advanced planning had enabled me to develop a contact at this destination through a friend who makes custom handbags from leather goods in Lagos. I understood the relevance of this once i arrived at the market because it is absurdly large, you could easily get lost and caught up with excitement at all the stalls selling leather, suede and the like.He also offered me invaluable advice on understanding how market traders price leather and how i will  be able to identify real leather from the fakes. 

My friends cousin did a stellar job trying to navigate the taxi to my leather contact. He jumped in and out of the taxi more than ten times asking locals if they had heard of the road we had been advised the stall was located on. We sent the taxi driver the wrong way a number of times often getting caught up in a traffic of market customers. We even phoned my contact several times but he was quite useless in directing us. The Igbo to Igbo conversation between my friends cousin and the leather contact still led to confusion. (I imagined if i had gone alone like i intended to initially..what a joke that would have been).

After half an hour of navigating Mushin leather market by car we eventually located the contact. He was just about packing away so i was thankful i had arrived just in time. A little more face to face Igbo conversation and the contact was soon throwing all his colourful leathers on a wooden table in front of me. And they were amazing! Red, yellow, mock croc skin, mock snake skin or whatever, an array of leather...i was certainly impressed. Out of the millions of skins he offered to me I narrowed it down to five and then studied the fabric for its dyed colour, holes in the fabric, size and then cost. Eventually i chose only one, (i know, stingy right!) slightly large piece of fabric, one side dyed navy blue, the other side dyed black with gold flecks (main picture). It is a stunning piece of leather and i started my negotiations, eventually purchasing it for what i felt was a bargain!

I could have easily stayed at the market for an entire day if i had arrived earlier. Beautiful suede fabrics, synthetic leather, raw leather hides; stalls were busy and lots of (informal) money was changing hands. Leather, an apparently $43.4 billion export industry in Nigeria, is crying out for investors (click here for more info). So yet again, another area for private investors to splurge their cash in. Also another area for the government to stop neglecting and start investing in. 

Believe it or not, footwear is prohibited from import into Nigeria, (Exactly. Click here if you don't believe me) so investing in the leather industry will aid in boosting manufacturing industries in Nigeria such as shoes, handbags, jackets and furniture, potentially spilling over to other parts of West Africa, wider countries in the  continent and internationally, thus producing jobs, boosting the market etc etc.

Yes Olusegun Aganga...i'm talking to you!

WHY A LITTLE LAS VEGAS COULD CONQUER RETAIL IN CONTINENTAL AFRICA

If you have followed my blog you will know  by now that one of my focuses has been on the lack of international standard shopping malls on the continent resulting in the lack of potential growth for international retail brands being able to invest in the continent which has a lot of knock on effects for other gripes i have. Returning from a recent trip to Las Vegas, it was amazing/fascinating/incredible to see that hotels along the "strip" have international standard shopping malls within their resorts! And they are fabulously designed! (see picture above).

 So why is it that the continent of Africa is getting it so wrong?

Stumbling upon the Sagachireserach.com website (they focus on Market intelligence across the African continent) via the website HowwemadeitinAfrica.com (as the website title suggests), Sagaci researchers have put together a categorisation and ranking of malls in Africa according to their overall attractiveness to leading "international tenants". At the top, "AAA" ranking relate to malls among the worlds best properties. At the bottom, a 'D'  ranking means it is among the least attractive properties.

Upon reading the rankings i could do nothing other than sigh, roll my eyes and shake my head. I should not really be shocked... but i am, because a continent as rich as Africa should really be able to rival a city such as Las Vegas.

Ok, so here are the rankings;

AAA:4 malls
AA:8 malls
A:13 malls
B:16 malls
C:44 malls
D:126 malls

Now you see why i was shaking my head...

So what does this mean? It means that D's figures need to become AAA figures asap!
Developers who have mentioned or who are planning to build malls need to take the breaks off, stop discussing and start doing! Those with the type of wealth i am striving to accumulate (*cough,cough*) should form consortium's to build or invest in the development of shopping malls or better still, while building hotels build them with shopping complexes like Las Vegas!

Not to sound completely negative... there is also a ranking, provided by Sagaci, of the top 5 shopping centres in Sub-Saharan Africa, albeit that South Africa is not included in the ranking because undoubtedly they are the market leaders on the continent in international standard built malls. Nigeria rank twice among the 5(!) along with Ivory Coast, Kenya and Senegal;

Name of mall	Country	City	Gross leasable area (sqm)	Ranking
Sea Plaza	Senegal	Dakar	14,000	AA
Cap Sud	Ivory Coast	Abidjan	6,500	A
Ikeja City Mall	Nigeria	Lagos	22,650	A
Polo Park Mall	Nigeria	Enugu	20,000	A
The Junction	Kenya	Nairobi	26,000	A

Sagaci's research outlines that there are plans for mall expansion pan-continent, with the aim to try and lure new brands to co-exist with the pioneers who have already made the brave move to invest in the continent (KFC, Mango, Etam,Shoprite),

“In the coming years, boosted by the emergence of a middle class and by the expansion of international brands, the total shopping centre surface should double… with 129 new shopping centres in project across the continent (including 17 in Egypt, 15 in Ghana, 14 in Zambia, 12 in Angola, 12 in Nigeria, 12 in Morocco). Beyond these projects, some countries such as Nigeria, Angola, Tanzania and Ethiopia remain very attractive for developers with an unmet demand of five to 20 shopping centres in each country between now and 2017,” Sagaci noted.

Hmmm...let's see what happens shall we...

NIGERIA;RETAIL LAND OF OPPORTUNITY. PART 1; BALOGUN MARKET

So since my last posting i decided it was about time to put my research,writing and thoughts on the continent into practice by actually visiting and conducting some on the ground research into the retail market.
Destination choice; Nigeria
State;Lagos.
Length of stay; a short ten days with an action packed itinerary befitting somebody with knowledge of and the means to get around Lagos; I didn't have either.
Areas of interest;the formal retail market (shopping malls) and  informal retailing; Balogun and Mushin Market.

So how did my visit go? Firstly i must remark that the the temperature was excessively hot (not that i'm complaining now that i am back in the UK...) so i must commend the market traders who spend time in the heat day to day trying (and certainly succeeding) in making a living.

 Having researched chosen  destinations to visit whilst in Lagos using a number of websites and print media, including the Delta Airlines Sky Magazine, which interestingly is absolutely fantastic in their guide to visiting Lagos state (most of my destinations for checking out the Lagos retail market came from this site) i set about commanding family and friends to organise the logistics to get me to these destinations. Naturally, when you are not 100% familiar with a territory, one can be disillusioned into believing that destinations are relatively easy to get to, thinking the city is small enough to navigate around. So when i was met with coughs and splutters from family and friends to the requests of me needing to get to places such as Balogun, Mushin and Makoko, i was puzzled and saddened by their reaction. I was even warned against going to the markets for a number of entertaining reasons. I tend not to pay attention to warnings.

First destination on my itinerary was Balogun Market. A three hour taxi journey later i understood why my family and friends suddenly found themselves "busy". Speaking in a British (?) accent and probably paying over the odds for my taxi ride, i arrived at Balogun market to be greeted with a colourful chaos. Balogun is a textile market where allegedly you find all the best West African fabrics. The Delta Airways Sky magazine cites that if you visit this market you earn bragging rights for navigating it...so time for me to brag! It was an amazing experience! Among the hustle and bustle, people are making their money, although competition seems fierce as there is literally rows and rows of stalls selling similar or the same Ankara material and the like. Price collusion is rife; every stall charges the same price for fabric, or rather they did to me (British accent causing me problems). I had managed to persuade a friend, who had initially informed me that they had never been to Balogun before, to meet me at the market. Quite fascinating that they had not visited the market, despite the fact they lived less than 20 minutes away.  I began to get the impression that the markets, or at least Balogun, were only for a particular type or class of Nigerian. Hmmmm.....

Market traders were jolly and enjoyed the fact that i was sweating profusely whilst trying and failing miserably to negotiate prices for materials. The market itself is HUGE and absolutely heaving with shoppers. It is however a health and safety nightmare!(see picture above)  I wondered how much money was changing hands here, the total revenue incurred from this massive hive of informal activity. I also partially hallucinated (it really was ridiculously hot) that the market was indoors, where shoppers, such as myself of course, could bask in air conditioning whilst looking at all the lovely fabrics. Or at the least be indoors so that there was shade from the scorching yellow object in the sky. Thoughts of markets i have visited in Shanghai, China, popped into my thoughts, as they were indoors but still very much in the style of outdoor markets with each trader having their own stall. Anyway back to reality...scorching heat.

N.B:I later found out that there is indeed a mall recently constructed in Balogun but  tenants are currently going through problems with the owners and have been evicted. Of course the mall can only house the select few who can afford to pay the rental cost so ultimately the outdoor market will prevail.

I was also impressed by the vast number of stalls selling womens clothing. Lots of on trend clothing imported, no doubt, from China, U.S or Europe. And there were lots of women buying. LOTS. The retail potential for Womenswear in Nigeria is ridiculous but yet there is clearly a lack of formal retail outlets and malls. Build a Mall of America, a Westfield, a Mall of the Emirates and fill it with a combination of western, Nigerian and continental wide African designers and watch the formal retail economy boost Nigeria's GDP...! A no brainer really.

Verdict: Overall, a successful and exciting experience. I left the market armed with two 6 yard Ankara print material and a feeling of pride of having negotiated/conquered this busy market, despite the warnings.
Mushin here i come!

HUGO BOSS; LAGOS VIA GERMANY

With the developed world continuing to take more of a business interest in emerging markets it is only befitting that luxury retailers are grabbing a piece of this lucrative pie. The launch of Hugo Boss at the Palms shopping mall brought out guests and celebrities from the banking, fashion and entertainment industries. Sponsored by Moet et Chandon, it was reported to be a lavish and sophisticated affair that sponsors the image of the brand.
For me, my excitement of this launch is the possible ripple effect and influence this store opening will have on the  continued growth in the number of luxury retailers who will make their first move into the Nigerian retail market. My long term vision and impact of this growth would be for the manufacturing of the garments to take place in Nigeria or at least within the ECOWAS trading bloc...

Yes i know...one step at a time...

But with last years IHT Luxury Conference attracting over 550 delegates, all celebrating and promoting the potential of the luxury fashion industry in the continent, this maybe a vision that  may come into fruition sooner rather than later...!

SUPERMARKETS IN,KIOSKS OUT! THE RISE OF CONVENIENCE SHOPPING CRIPPLE KENYA'S INFORMAL RETAIL MARKET

Uchumi;One of Kenya's leading supermarkets

  Leading supermarket chains in Kenya are expanding from their usual city-centre focus into residential areas creating convenience for shoppers to purchase all their requirements under one roof but meaning that this will impact on resident kiosk owners. Supermarket owners argue that they are not killing business for the kiosk owners, but state that kiosk owners have the benefit of late night convenience, cheap operations and the ease to move their operation to areas of their choice if the market for their products declines. 
Driving the growth of the supermarkets is the emergence of the middle class who prefer to shop in formal settings, citing reasons such as convenience, pricing and good facilities as opposed to the markets or 'Duka' as they are known in Kenya.  
“Kenyans are (therefore) exploiting this accessibility and convenience to shop for consumables such as bread, milk and groceries on a weekly basis,” said Consumer Insight Managing Director Ndirangu wa Maina, the company behind a survey conducted to investigate consumers shopping habits.
 The slow death of kiosks is also being attributed to the frequency in which consumers shop. The survey highlighted a 40% increase since 2011 in consumers buying their necessities weekly. Consumers that shop two or three times a month remain unchanged at 22%.
 “The trend towards weekly shopping is a factor of the personal economic insecurities amongst Kenyans. With the high cost of living, many people are weary of emptying their barrels in one round of shopping and prefer to space it out,” said Uchumi Supermarkets Chief Executive Jonathan Ciano.
Kiosk owners and non-supporters of the growth of the supermarkets believe that the government should wade in to put a restriction on the supermarket invasion. Job losses will be felt throughout their small supply chain impacting on the neighbourhoods in which they operate. Mr Ciano agrees that there are risks to the future of the kiosks when the supermarkets evolve. Despite the reasons why they may still play a key role to local residents, the challenge will certainly remain for them to compete against large, well-stocked supermarket stores. Is this the beginning of the end of informal retailing in Kenya i wonder...?