Thursday, April 3, 2008

Cheap AND Cheerful? In Nigeria?

So a response from 'anon' to my last post got me thinking.

Her comment was…
”I'm interested in why you think retail a la Primark and F21 won't work in Lagos. Pray tell! Thanks :)”

I started my answer which turned into a bit of an essay so I decided to share. I’m certainly no expert on retail but I’ve been in the field for coming up to three years so I’ve learnt a few lessons about Nigerian shoppers along the way. The main one being they're a tough crowd but when they like something they love it so big up to the Tiger Tem massive!

I remain unconvinced you’d get the footfall needed of ready to spend shoppers. Primark and Forever 21 transcend many barriers such as age, class, status as they offer cheap, disposable versions of high end products a lot of people can’t afford. Yes they do basics but I suspect their main trade comes in from the more ‘fashion’ items…otherwise perhaps they wouldn’t be changing stock on an almost daily basis.

Prejudice is alive and kicking in Nigerian society. Go cheap, you exclude the people with money, almost instantly..the snob factor I call it. Go expensive, you exclude the people without money. In Nigeria, I don’t think we have that pride in ‘Oh my god you won’t believe how cheap this was!’ In the US and Europe, it’s a full on competitive sport.

Nigerians don’t have the obsession with celebrity, fashion, catwalks, fashion seasons the same way as Europe and America, where the demand is feed/created by numerous magazines, TV shows etc. So I don’t believe we’re as likely to gravitate towards cheaper versions of high fashion products. Our Local Celebritries usually wear some approximation of which case cut out and keep the pic, and take it to your tailor.

Location would be another key factor. Do we have the equivalent of Oxford Street? Times Square? The cheap shops pick prime locations to maximise exposure and footfall abroad. So where would Primark go here? The Palms? The location already excludes a significant portion of its market. People with less cash would be intimidated by the location and would continue to shop at Tej market or Balogun market. Unless of course you’d want to put it in Tej…in which case, Primark you’re not, market trader you are. BIG difference.

I don’t have detailed knowledge of the true cost of living for the average Joe in Nigeria so I’ll tread a little carefully here. The difference in disposable cash in Nigeria and abroad is huge. The day to day costs of life in Nigeria are high and salaries are extremely low. So this limits the amount of disposable cash for people at the lower end of the salary scale. In Europe and America, the differences aren’t necessarily as huge.

Minimum wage in the UK just hit £5 I think, so if you work a 40 hour week that’s about £800 which is a pittance. Or 200 000N which is a damn good salary and definitely not anywhere near the bottom of the salary scale. I know in the UK at least, living can be heavily subsidised by the government and in the US as well, and that’s before we even get onto rent controlled apartments.

I’m aware that’s a big generalisation so any more informed readers feel free to correct me.

And lets look at South Africa. It’s the ‘easy’ Africa for most retail giants and they’re yet to get the really big European or American retailers in there (unless things have changed dramatically in the past year). I heard LV and someone else like Gucci just moved into Cape Town….but the cheap as chips shops….I suspect they’re dubious as to whether they’d get the footfall. And South Africa has a proper thriving retail culture. (by proper I mean a proper shopping experience).

When Topshop released the Baxter skinny jean, within weeks they were selling 18 000 a week. Let that marinate for a second. 18 000 women, who could find their size, liked the fit and had the £40 odd to drop on them. Or 10 000N.

I think its most unlikely such figures could be achieved here. And then add the hassle and undue expense of running a business in Nigeria and I go back to my starting point that a slightly more mid range store would probably do better. They sell less at a higher price and simple economics mean provided you can strike the right balance, you’ll probably make more money. And isn’t that what retail is all about? Just look at Sir Philip Green...the billionaire.


delabique said...

hi tiger, first let me say thank u for your very incisive response to my query, thanks for taking out the time to write that very long and enlightening email

A quick one bout the retail therapy thing. Need to clarify if

1. what will be sold in 'retail' is stuff made by nigerians in nigeria?

2. will the retailers be the already established international retailers like the 2 sited in the post? OR do u mean an entirely new crop of home grown retailers?

3. if the international retailers eg Primark come to set up shop here eg Primark, they will make a kill o contrary to what u are speculating. Have u been to China town or all dem spots in 'Lagos@ market? Those peeps sell like crazy! Primark will be affordable to the average Nigerian 'worker'. Meaningbus conductor, okada driver, hair dresser, tailor, etc.

Those people buy baffs really frequently. Okada drivers wear nice looking jeans matched with 'designer' t- shirts e.g. 'HACKET' albeit being d cloned version.

My tailors manage to look good, all of them wear nice looking jeans and each would own at least 4 pairs of blue jeans and at least one black one with loads of nice looking t-shirts and pls note i don't mean 'second-hand' clothes .

These people manage to give themselves a retail therapy whilst those of us who are a bit more 'priviledged' cant get a decent store to buy 'presentable' stuff all bcos of the 'cheap is not chic' nigerian syndrome

4. Even if we as Nigerians belabour ourselves with the task of trying to produce(manufacture)garments and accessories in Nigeria; the major debilitating factor would be the lack of specially skilled labour to do the job and not NEPA or PHCN as many are wont to believe.
Believe it or not in the south here, there is a great dearth of skilled personnel in fashion production unlike what obtains in the Eastern part of the country.

We still have a long way to go n terms of packaging our manufacturing processes and running well organised factories involved in the production and sourcing of mass produced ready to wear garments and accessories as against the 'custom-built' which is what most tailors('designers') are doing.

So does the solution to having a successful retail therapy in Nigeria lie in inviting the successful international fashion retail stores like PRIMARK to come in as foreign investors?
my contribution:

Chineze Osayi said...

tiger tem, thanks for your detailed answers to the anon's question.

i would agree with you, and daresay, that you are right.

i think it's best for nigerians living in nigeria to continue doing what they know best: shopping at boutiques, markets, and taking their fabrics to their tailors/designers???

in terms of the primark business, in my opinion, i should say, "that they should leave the idea where it works best, and should they really want to have clothes/items from the shop. Then, they could have someone buy it for them or shop for it themselves as most of them visit the united kingdom from time to time."

anyway... thanks once again, and all the best.

Anonymous said...

Hi Tiger,

I have to say that 'the island' i.e. Ikoyi and V.I. doesn't really represent Nigeria. I think if women here had a choice, Primark, F21 etc would just go crazy in those stores. If you shop in Ikeja, you'll find that the women there tend to mix n match, cheap n chic, which is exactly what those stores are meant for and exactly why you find them on the high street, close to the more expensive retailers. Its all in the combo.

Secondly, I think you'll find that most 'island' women don't really have the disposable income they pretend to have, which is exactly why they shop in the UK and the States. Its cheaper than shopping over here and you have more choice.

They may not want to shop in those stores, lest they be seen, by fellow socialites on the island but trust me, they're in the minority. Ikeja babes, Unilag babes and those that can't get visas would run down those stores in a hot minute!

Tiger Tem said...

@anon..very, very interesting points. Just inspired my latest post