How to succeed in Nigeria Market
Nigeria and Türkiye have enjoyed a long-standing relationship, both in terms of political and economic ties. Türkiye has been an important trading partner for Nigeria, and the economic relations between the two countries continue to grow stronger each year. With a population of over 200 million people, Nigeria represents a vast and growing market for Turkish businesses.
However, succeeding in the Nigerian market requires a deep understanding of the country’s business environment, cultural nuances, and regulatory framework. This article will provide some of the best practices for Turkish businesses to succeed in the Nigerian market.
Conduct Thorough Market Research:
The first step to success in any market is conducting thorough market research. Turkish businesses need to invest time and resources in understanding the Nigerian market. This includes studying the cultural and social differences between the two countries, understanding the regulatory framework, and researching potential partners and competitors. A good market research strategy should provide a clear picture of the market potential, market entry barriers, and potential risks and opportunities. It helps businesses strengthen their position in minimising risks, identifying potential threats, strength, weaknesses and opportunities, facilitating strategic planning, identifying emerging trend, staying ahead of competition, providing revenue projection, focusing on customers need and demand and evaluating the success of a business against the benchmark.
Find the right route to market.
Partnering with local companies is a key strategy for success in the Nigerian market. Local partners can provide valuable insights into the market, help navigate the regulatory framework, and provide access to local networks. Nigerian partners can also help Turkish businesses understand the cultural and social norms, and tailor their products and services to suit local needs. Nigeria’s market is highly fragmented and companies need to think carefully about their distribution network. While the commercial hub Lagos is relatively well served by distribution networks, there is a drop in quality and reach in other cities.
Over 70% of consumer goods sales currently go through informal channels such as small shops, market stalls and street vendors. Nigeria still has one of the highest rates of informality in grocery retailing in Africa at an estimation of about 74%, compared to 19% in South Africa. However, formal retailers such as Shoprite and Artee/Spar have been expanding in the market and sales in modern stores are growing by 28% a year, although from a low base. Companies new to the market are generally advised to partner with local distributors with established networks.
For example is Coca-Cola which relies on a large network of independently-owned manual distribution centres that are financed and trained by Coca-Cola. The company also supplies these distributors with pushcarts to make manual distribution easier in areas with poor roads. In this way it has created a capable and loyal distribution network.
Support the local talent
Investing in local talent is a key strategy for Turkish businesses to succeed in the Nigerian market. This involves training and developing local employees to understand the company’s culture, products, and services. By investing in local talent, Turkish businesses can tap into the local knowledge and experience, and build a loyal and motivated workforce. A skilled local workforce is also critical for building long-term relationships with local partners and customers.
Despite all its consumer potential and GDP growth, the real rewards for entering the Nigerian market may take years to materialise, and investors and companies require patience, persistence and a long-term commitment. Companies can expect to encounter human resources challenges, and will likely have to invest in a long-term talent development strategy.
In Nigeria, as in other parts of Africa, employers say that their top concern is the cost of qualified job candidates. In Nigeria, employers cite an overall lack of job readiness as a major concern, followed by lack of experience and specific skills. The implication is that companies will need to invest in both broad-based and job-specific training.
Develop a Strong Brand and Marketing Strategy to drive customer loyalty.
Developing a strong marketing strategy is essential for Turkish businesses to succeed in the Nigerian market. A strong marketing strategy should be tailored to local cultural and social norms, and should use local language and images. Social media and digital marketing can be particularly effective in reaching the Nigerian market. Turkish businesses should also consider sponsoring local events and engaging with local communities to build brand awareness and loyalty. While Nigerians may be price sensitive, they are significantly more brand loyal than the average African.
According to surveys, 70% of Nigerians say their purchases are based on brand loyalty, compared to 59% of sub-Saharan Africans. Furthermore, just 27% of Nigerians indicate that they choose their products based on promotions, compared to 38% regionally. One of the reasons for this is that the Nigerian consumer environment is characterised by low trust, and brands therefore serve as a mechanism to assure the customer of a product’s quality.
Brand loyalty can be gained through introducing a relevant, affordable product; educating Nigerians on the product and its benefits and then building trust around the product’s brand name; and advertising heavily in local languages. Today television is the dominant medium for brand building, but internet use is growing rapidly (half of urban Nigerians access the internet each month, and more than 58% have internet-capable phones). Already, wealthier consumers use and trust online sources to a large extent.
Set the right price.
Setting the right price for products is particularly important in the Nigerian market. According to McKinsey Africa Consumer Insights Center, Nigerians are among the most price-sensitive in Africa with surveys indicating that 21% would rather shop in a store that has a narrower range of products and a worse shopping environment if it simply offered lower prices.
To reach a range of Nigerian consumers, Türkiye should develop a portfolio of products that caters to the different income levels. This must be done carefully: products for lower-income consumers must be differentiated to avoid cannibalisation of higher-priced products.
Conclusion
The Nigerian market offers a wealth of opportunities for Turkish businesses looking to expand their reach and increase profits. By adopting the best practices outlined in this article and taking the time to understand the cultural nuances and business environment in Nigeria, Turkish companies can position themselves for success in this growing market. The Nigeria-Türkiye Business Council (NTBC) is committed to fostering strong business ties between our two countries, and we encourage Turkish companies to explore the many opportunities available in Nigeria. Together, we can build a prosperous future for both our nations.