Increasingly wealthy Nigerians: fast cars, healthy foods and fashionable clothing
It is generally agreed that Nigeria offers investment potential for companies looking to capitalise off the population’s increased consumer spending power.
With the Nigerian middle class growing and favouring supermarkets, the country is becoming a destination for retailers, many of which are South African. In addition, research by Euromonitor International indicates that South African retailers are starting to target cities beyond Lagos and Abuja. Massmart, Woolworths and Shoprite all recently opened stores in the south-eastern city of Enugu, while Massmart and Shoprite have plans to open outlets in the northern city of Kano this year.
Euromonitor’s data suggests that Nigeria’s fastest growing major cities between 2010 and 2030 will be Ibadan, Maiduguri and Kano respectively.
Movement towards healthy eating
Nigerian consumers are also becoming more concerned with healthy eating. “A survey of 700 consumers conducted by newspaper Business Day Nigeria during October 2012 found that while price was still crucial to the Nigerian consumer, health considerations were becoming more important,” says Euromonitor. “Fifty per cent of respondents said that they read the labels of packaged food and beverage products before purchasing them. Thirty-nine per cent said that they would like to see more nutritional information, including calorie counts, on restaurant menus.”
Developing a taste for wine
Another trend is that Nigerians are increasingly moving towards wine consumption. Last year How we made it in Africa reported that Wines of South Africa (WOSA), an industry body representing South African wine exporters, has identified Nigeria as a major export market.
“Wine consumption in Nigeria rose from 18.8 million litres in 2006 to 44.3 million litres during 2011,” states Euromonitor’s data. “Moreover, it is expected to rise by a further 80.4%, to 79.9 million litres, by 2016.”
Last year, 60% of wine sold in Nigeria was imported from Europe. South Africa is, however, the second biggest exporter with 22% by volume share. South African wine exports to Nigeria also grew at 12% between 2011 and 2012.
Nigeria also has a budding local fashion industry and the Lagos Fashion & Design Week in October last year attracted European companies, such as UK-based Selfridges & Co. and German online retailer MyTheresa.com to Nigeria for the first time. “However, rather than attracting European consumers, these retailers are primarily interested in selling designer clothing to affluent Nigerians on shopping trips abroad,” according to Euromonitor. Bruno Barba, PR manager at Selfridges, said, “Nigerians are among our highest-spending foreign customers.”
Porsche’s entry into Nigeria in March last year, with the opening of its first dealership in Victoria Island, one of Lagos’ wealthiest areas, is an example of how luxury cars are appealing to the country’s richest of the rich. Furthermore, the German carmaker also plans to set up an operation in Abuja.
With an estimated 200 Nigerians owning Porsches when the firm opened its Lagos dealership, Porsche Nigeria aimed to sell 100 vehicles in the country during 2012, rising to 300 sales per year from 2013.
According to Euromonitor’s data, “0.4% of Nigerian households had an annual disposable income of more than US$100,000 (at purchasing power parity) during 2011”.
Nigeria already has dealerships specialising in Aston Martin and Lamborghini.