Thursday, May 8, 2008

Lagos...Big City of Dreams

Time for a good old gripe.

I'll start with Swift Communications. My internet service provider. When we first started using them about 6 months ago, they were fantastic. Same speed as broadband abroad. To be fair their customers services are great, they call back when they say they will and they send out their engineers when needed.

BUT...a few months down the line and for the most part the internet service is a bit shite. I spend HOURS (no joke) trying to uplaod my pictures now which is why I might seem to not update so frequently. Trust me, its not from lack of trying. I've been tring to upload my last post "Full Length & Fabulous" since SUNDAY!

So what I want to know is how come all good things in Nigeria always seem to come to an early end? Why is it that so many businesses and entrepreneurs start out so full of promise with high expectations and even higher standards yet a few months/years down the line its usually a very different story.

Why is it so damn hard to maintain any sort of standards in Nigeria and why does it seem to be ten times as much work to keep things afloat.

Where to shop?
Our crap infrastructure that really doesn't help. Bearing in mind my knowledge and exposure is limited to the retail sector..The running costs of a business here are astronomical and yes, I think they're higher than the UK/USA. Think about it, you pay two years rent up front, a service charge, you'll need a generator, probably ahev to put in your own water system and that's before you start any refurb.

And I believe the set up costs are very similar too. The commercial rent is comparable to what would be paid abroad, and you're guaranteed to have a much lower footfall in Lagos than you would on a high street in London.

Too Many Chiefs, Not Enough Indians
One significantly lower cost is staff. But that's a false economy as you have to spend so much time micro-managing, checking, cross checking, correcting, training re-tarining, explaining re-explaining that you really don't get enough time to do much else. Why do staff in Nigeria seem so lazy? They start out great and before you know it they're not so good. I've heard too many stories of staff setting up side line businesses, shafting their boss, leaving to set up the same type of business.

I often wonder where the future of retail lies in Nigeria. For a country with so much money, we don't have any international retailers here. Even Swaziland do! We don't really have anywhere that offers a true shopping experience. before anybody says Mega or The Palms...what exactly is it apart from food or electronics are we supposed to be buying in there?

I'm always being told stories of oh so-and-so are planning on moving into Nigeria...Before people go getting overexcited, just check where else in Africa they have set up shop. If tehy're not in South Africa, they ain't comin g here. South Africa is a much easier market to analyse and predict with a more atble economy and better established retail sector so just why exactly would they bypass that for Nigeria first? I've heard Zara are moving here so many times. No. They're. Not. They have a couple of spots in Morocco yes, but I definitely believe they'll be moving into South Africa next and somehow not Nigeria.

I touched on ths topic of retail in Nigeria a few weeks ago, take a look.



The last comment which was posted this week got me thinking about the retail sector in Nigeria again.

But I want to know what you all think...where does the future of retail in Nigeria lie? And who do you all think will be the first proper (retail) international chain to set in Nigeria?

13 comments:

Anonymous said...

I think it will happen sooner rather than later... thought it is going to be a gradual process. The investment banks have started the trend, other coy's will soon follow suit.

5-7 years give or take. My bet is on H&M!!!

Meanwhile kudos to u on running your own boutique, keep up the goo work...

SET said...

This must be serious, the cost of rent is ridiculous as well. Rent being comparable to Europe or America is crazy, the job opportunities are not comparable. That is why they charge 5x the price to make the money spent on rent which is 2 yrs upfront.

How can one even anticipate a big shopping outlet when it will cost more to rent and renovate and decor that the clothing. We will see this will happen one day soon. With the ban and all its hard.

AlooFar said...

The boutique venue?

Ladi said...

I actually had the Swaziland topic in class.

Sweatshops!!!!

shop liquorice said...

soon come, soon come! things are progressing rapidly and it's only a matter of time. we 'afropolitans' are starting to borrow ideas from cities we've lived (silverbird, the palms, etc.) and i'm positive someone will satisfy our need for retail soon...enough. of course, there are many hurdles to cross...but it wouldn't be nigeria if that wasn't the case. i can't imagine moving back to lagos and not being able to go to the mall?!?!?! i shouldn't have to dash to dubai for a white tee, damnit! fingers crossed for franchises and nigerian-owned malls (and stores! what's stopping us from setting up factories and making our own stuff? don't answer that, lol) in the very near future...

AMEN.
lol...

xo

Chineze Osayi said...

Tiger Tem, you are so right. One thing i would say is that some Nigerians are so full of excitement. Excitement is good, only when one has really sat down and thought about the pros & cons of their businesses and have a long term thinking plan like the Japanese - as i heard and read from a book.

The Japanese tend to have a long-term plan that lasts up to 100 years; would i say work plan/goals. They don't look at their businesses or companies at where it could be NOW but what it could turn out to become in about say - a 100 years. I would say, "that SOME Nigerians being affected by what you've just described might want to take a cue from the Japanese." They are mighty disciplined individuals, that is, the Japanese.

Simi Speaks said...

Hey girlie!! Just tagged ya!! :-)

pink gloves said...

Tiger Tem, i feel u exactly. I have been longing to start a handbag business, since i manage to buy a lot of them myself, and have an appreciation for them, but when i think about costs etc, omo i get week. I have resources outside of nigeria that i can exploit, but my fear is inside Nigeria. No light, no decent staff ( cause everybody wants to play big man), even when u have staff- "they will thief u dry" like my mom would say.
I have decided for right now to get on the other side of the fence and build a mall.

PS: as for staff, i might have recommendations for you. Just email me if you want dialogue on it.
When it all comes down to it, business should be profitable, not a loss.

I am really interested in manufacturing in Nigeria, but men, the electricity costs to keep things up and running is too much for me to stomach.

Anonymous said...

Hi Tiger,

This is 'anon', the inspiration that got you back on the topic of retail, again. I'm a retail guru and just to expand that means I love retail, have worked in retail and dream of being an African retail mogul. As you can imagine retail is a very touchy subject for me.

I moved to Nigeria two years ago, the land of dreams for Nigerians, looking for opportunity, fortune and a lack of racism. Boy was I naive. Nigerian society is complex, one of the most complex societies I have ever lived in. I've lived in London, New York and Johannesburg. Nigeria has to be the worst so far and I'm Nigerian.

We are a society driven by 'self' and by that I mean each to his own. We do things, not for the greater good of our people and nation, but for individual wealth. This is a society where people think it is ok to 'rob and be wealthy' not 'work and be wealthy'. This school of thought runs deep and penetrates the minds of all sorts of people, from the lowest to the highest echelons of society.

The completion of a job, project etc will always be shoddy, because the aim was never to do a good job it was to make money. Your staff will always cheat you because their aim was never to do a good job, it was to infiltrate your business and make their own money. I'm sure it’s the same at Swift, your internet provider. They were probably paid to buy a certain bandwidth but decided to buy a lower bandwidth to...you guessed it...make a larger profit. Hence your slow almost non-existent service.

Yes, there will be retail and yes I believe it will be sooner, rather than later but there are huge hurdles to be overcome first and a lot of these hurdles are self-induced by us here in Nigeria.

I have several key contacts with the major retail brands, the world over and I have been in dialogue with some of them for a very long time. Some probably in the region of 6 years. Yes they are interested, but no they don't want to set up shop in Nigeria, not just yet anyway. First off, we have to lift the ban on importing fashion items into the country. You cannot establish a viable business with an international company when the laws in your country prohibit that sort of trade. People seem to forget this because they see shops everywhere. There is no way on earth H&M, Mango, Zara, Primark are going to build in 'bribes to custom officials' as a cost on the cash flow and balance sheet.

Secondly, we do have a booming economy and yes we may be one of the few countries with predicted growth over the next few years as opposed to the recession Western economies are facing right now. But this does not take away from the vast poverty experienced by the majority. 75% of Nigerians supposedly still earn less than $1 per day.

Now allegedly there are 140million of us, that's a lot of mouths to feed and reports sent out to the West claim that of the 140million less than 2% of us are in well paid jobs. That's not a lot of spending power, so the retailers are understandably reluctant to set up shop here.

We haven't even touched on the subject of infrastructure but that's an obvious one so I'm not even going to go there. And it’s for this same reason we don't have retail factories.

I personally believe that no matter what the research, banks and reports say, shopping will always be a priority for men and women in Nigeria, regardless of the official spending power. Our genetic make up as a people, showing off etc, requires that we look our best even when we are as broke as hell.

I also believe that it’s a matter of choice and if we had the opportunity to go shopping in branded stores we would.

So my conclusion is this, we must persevere and I believe there are enough of us now who can see the benefits of having a nation that works well for everybody.

We now have Fashola working on the Mega City Project which will hopefully bring some sort of order to the mess that is Lagos and allow people like myself to open up stores with affordable rent and rates etc.

Anyway good luck Tiger and I'll keep you posted.

PS. Mango may be here sooner than you think.

Tiger Tem said...

Well I can see this is a topic close to many hearts!

@anon...I agree the banking sector might inspire growth and confidence in other sectors. Thanks for the kudos...it ain't easy!

@set..it is. Very serious. I think the Nigeria (the staff, the government, the infrastructure, the work ethic) makes it harder than it needs to be.

@aloofar...the boutique venue? I don't know what you mean. My boutique? the Ikeja branch is at 4 Ogundana Street at the front of Ivory Health Club. the Ikoyi branch will open in October in the NNPC building on Kingsway.

@Ladi...really? sweatshops? How interesting. I had no idea. Tell me more please!

@shopliquorice..I like that. Afropolitans. And no I won't answer the rhetorical factory questions!

@chineze..100 years? Wow. that's some serious planning. I like. I definitely agree with you about people getting unnecessarily excited. A very famous quote by Milan Kundera 'excitement always ends in tears'.

Tiger Tem said...

@pink gloves...not so sure a handbag business is more stressful than BUILDING A MALL! That's an amazing project for you to be doing. Have you started already? Where is it and who are you targeting as retailers? Let us all know more! I agree with your points about staff and the hassle of manufacturing though.

Tiger Tem said...

@anon...hello! Thanks for such an informative response.

The society here is totally nuts. Small, wealthy and not enough to do for entertainment. I think we do have to be one of the most self oriented societies I know and it never ceases to amaze me. I'll do a post on that later as my response here would be very long!

I think you made very good points about the embargos, customs bribes, and our gowing economy. I definietly agree that Nigerians are obsessed with outward appearance so with time yes that will hopefully inspire a more organised retail sector.

I'm not that well informed on Fashola (yes that my disclaimer)
but from what i can see so far, so good. I just hope he gets enough time to make a lot more changes before he gets booted out.

Cheetarah said...

Babe can u saw starcomms? switch baby,lol! I dnt have anything positive to ad so i wunt