Africa Outlook

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

- Written by: Ged Nooy, Managing Director, Nielsen Nigeria

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 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.

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