NIGERIA – With over ₦205.4 billion worth of investment, courtesy of global retail brands in the last three years, the Nigerian retail market sector remains an untapped territory for investors, especially Wal-Mart, one of the largest retail chains in America that is looking to broaden its investment in Nigeria.
With eye on a projected $40 billion growth opportunity in food and consumer goods before 2020 in the country, the America retail chain with presence in 28 countries is planning to build retail shops across the country, starting from Lagos.
Wal-Mart, which entered the Nigerian market in 2010 through its Massmart division – Game Discount World Nigeria Limited, currently runs three stores in Lagos under the “Game and Valumart” brands, and hopes to use its Nigerian expansion to boost its global net sales, which stood at $486 billion so far for the 2015 fiscal year in the 28 countries it has established presence.
The expansion, necessitated by the need to care for the cravings of emerging middle class, a new generation of Nigerian consumers with sophisticated taste, has also resulted in the retail space in Nigeria being gradually transformed with the rise of modern shopping outlets that are targeting the emerging middle class.
However, getting its market share will not be an easy one for Wal-Mart as other retail giants are innovating and expanding across the country as well.
The scramble for the Nigerian retail space, which though is a healthy one for consumers, is fiercely led by Shoprite, which has opened 10 shops in Nigeria since its first outlet that was opened in 2004.
It would be recalled that Whitey Basson, CEO, Shoprite, noted at the opening of one of the outlets of Shoprite in Nigeria that the country can handle 600 to 800 stores if you look at the size of the cities and the penetration of supermarkets, and it can happen quickly.
This and the over 200 stores operated by South Africans also put the likes of Wal-Mart and other foreign brands on their toes.
But while Shoprite may be the retail champions in Nigeria, Spar, Park N Shop, Cash ‘N’ Carry, Park N Shop, Adide, a Lebanese chain, are playing prominent role in shaping the shopping lifestyle of people.
Adide, a Lebanese chain, PEP Store, owned by South African Pepkor group, are all doing same thing – wooing customers with the best of shopping experience.
As well, Mr. Price, Woolworth, Hugo Boss, among other prestige stores have also made their presence better felt by the Nigerian shoppers.
Of course, Lagos is ready to welcome as many retail chains as possible, especially now that oil price has fallen and governments at all levels are making effort at increasing their internally generated revenue.
At a meeting between Akinwunmi Ambode, governor of Lagos State and a group delegation led by Shelley Broader, president/CEO, Wal-Mart Europe, Middle East, Africa and Canada, the governor said Lagos under his watch was eager to attract foreign investments, which informed the creation of the Office of Oversea Affairs and Investment to act as a one-stop shop for investors willing to take advantage of the business potentials inherent in Lagos economy.
“As we speak we have 21 million people in Lagos and 4 million of this population are middle class. As much as possible we’re looking to attracting investments into the economy to be able to get the youths off the streets, and I am offering my commitment to making the investment climate conducive,” said Ambode.
The governor explained that the decision by Wal-Mart to centre its Nigerian expansion plans on Lagos speaks to the confidence the group has in the state, adding “we have the manpower, the citizens willing and able to work, and an expanding middle class ready to buy products and services of international standard.
“I was elected to boost employment and opportunity in Lagos, and this cooperation with Wal-Mart is an important step towards fulfilling that pledge.”
Broader speaking to the plans by Wal-Mart, said the company was incorporating into its expansion bid training of Nigerian youths in customers’ relations and how to produce and package products for export.
She also announced plans to open two more game shops in Nigeria within the next two months while exploring other opportunities for greater investment in the economy.
Top Nigerian economy analysts hailed Wal-Mart’s expansion plan noting that globally retail trade accounts for 27 percent of the world’s GDP, which means there are about $19 trillion of retail sales each year.
According to them, the retail sector also employs about 17 percent of the global workforce, about 800 million people. In the United States alone, one in every 10 people works in the retail sector, hence further investments in the sector in Nigeria are a welcomed development, they agreed.