Nigeria: A land of city dwellers seeking the simple life?
Nigeria is spearheading urbanisation in Africa, leading to an abundance of challenges and opportunities for consumers and corporates alike. Ged Nooy discusses
Following a turbulent period in its history, Nigeria is slowly returning to its former position as a land of opportunity with green shoots, from GDP growth and reduced inflation to the stabilisation of foreign exchange and political stability. As a result, Nigerians are feeling more open to spending, reflected in their positive consumer confidence scores.
With this momentum gaining ground, the Nigerian consumer landscape is set for a multitude of shifts. Urbanisation will be rapid, with city populations set to grow four times faster than those of rural areas, as consumers migrate for employment opportunities, as well as increased access to better infrastructure and amenities, trade, education, health, connectivity and other socioeconomic benefits.
In Sub-Saharan Africa, there are already 46 cities that are home to more than one million people, 17 of which are in Nigeria. Equally, a further nine cities across the country are expected to each add more than 500,000 people by 2025.
Fastest urban growth rate in the world
What this means is that by 2025, 55 percent of Nigerians will live in cities or towns with the country set to experience a 50 percent increase in its urban population – the fastest urban growth rate globally, ahead of China and India. It will also become one of only eight countries with more than 100 million people in urban areas, while the number of inhabitants in its large cities will increase by more than 91 million to reach 225 million in total.
This type of urban agglomeration opens doors for retailers and brands in more populous and economically dense areas, but will simultaneously intensify the strain on infrastructure and services. In many metropolitan areas, congestion is increasing, and people are spending more time commuting on public or shared transportation. Yet they still spend huge amounts of time in traffic jams.
There are 200 vehicles per kilometre in the Lagos versus the national average of 11 vehicles, with professionals in the city spending a quarter of their day commuting to and from their place of work when undertaking a 15-kilometre journey, making it the most congested city in Africa.
The desire for a simple life
With Nigerian consumers leading an increasingly hyperconnected life, where time is the new currency, they are looking at ways to streamline their lives. In essence, consumers seek three core attributes: ease, utility, and simplicity, as well as solutions that enable more fulfilment, enjoyment and balance in their busy lives. In short, consumers now require less to do more. Therefore, anything that saves consumers time and effort will be highly sought after.
This growing demand for convenience presents manufacturers and retailers with countless opportunities. Today, convenience transcends products, services and store channels. Packaging innovation, route to market, storage, portability and ordering, as well as device, payment and application technologies all need to be key considerations in providing an overall convenience experience.
The future of urban retail
In line with their need to simplify their lives, we foresee urban modern trade (MT) retail outlets such as supermarkets growing their share of trade in Nigeria, as consumers become more willing to pay for the convenience and time saving benefits of one-stop shop solutions.
Evidence of this is seen in the form of larger independent MT stores, which are already gaining ground in Nigeria’s urban areas, offering a combination of large and small outlets. It’s clear that brick and mortar stores are set to be the focus of growth before urban Nigerians even start to incorporate online elements into their shopping journey, with a lack of trust still posing a huge barrier to the adoption of digital platforms.
That said, it’s important to consider that Nigerian internet access is predicted to reach 85 percent by 2023, while mobile subscriptions are already nearing 100 percent. This growing smartphone penetration and the rise of smart homes, buildings and cities in virtual and physical worlds will escalate consumer connectivity to services to help streamline their lives.
Corporates therefore need to assess the attraction of urbanisation and look at how they can action these business prospects, via their operational structures and product portfolios, to meet current and future urbanised consumer needs. This will be underpinned by the understanding that they will need to deliver solutions in a variety of areas to help time strapped consumers, for whom simplicity is the ultimate driver, cope with the extreme speed of urban life.
Written by: Ged Nooy, Managing Director, Nielsen West Africa