1. DOING BUSINESS IN
NIGERIA
MAFED 2013 CLASS PRESENTATION
BY OROMA COOKEY-GAM
Thursday, September 5, 2013

2. NIGERIA:
COUNTRY OVERVIEW
Nigeria is a federal republic with 36 states. It is situated in West Africa
The country capital is Abuja but Lagos is the commercial hub
Nigeria has a population of 174 million people (making it the largest
country in Africa) and accounts for 47% of the population of West-
Africa
Nigeria’s population is made up of about 200 ethnic groups, 500
indigenous languages, and two major religions ― Islam and
Christianity
The national language in Nigeria is English
Nigeria is the biggest oil exporter in Africa, with the largest natural gas
reserves in the continent
Nigeria is the richest country in Sub-Saharan africa and has the
second most developed fashion industry in the region.
The Nigerian economy has grown by 6% for the last 7 years mainly as
a result of its booming oil sector
Nigeria is also very important for its entertainment industry- music
and film (nollywood)
Thursday, September 5, 2013

3. FOREIGN DIRECT INVESTMENT
IN NIGERIA Entry strategy is usually by Foreign Direct Investment
FDI in the fashion industry in Nigeria is vertical- distribution only
Method is usually by incorporating a wholly owned subsidiary
company or could also be by joint ventures with a Nigerian
company.
Nigeria receives the largest amount of Foreign Direct Investment in
Africa (approx $7bn in 2013) mainly due to its booming oil sector
In 2009 Nigeria’s FDI reached $11bn making Nigeria the 19th
highest recipient of FDI in the world
The main sources of Foreign Direct Investment in Nigeria are the
home countries of oil majors such as Exxon Mobil, Chevron Texaco
and Shell.
Sectors with major FDI inflows over the years have been the oil and
gas, manufacturing, infrastructure development, services and
consumer goods sectors
In Nigeria, 100% foreign ownership is allowed in all industries
except in the oil and gas industry.
However for convenience and ease of doing business international
investors in most industries choose to have a local partner. (e.g
Zegna, Hugo Boss in fashion
Thursday, September 5, 2013

4. NIGERIAN FASHION INDUSTY:
THE CUSTOMER PROFILE (DEMAND)
DEMOGRAPHICS
Huge Population
Customer concentration in 2 or 3 main cities
Customers are both male and female
No age limitations- Baby boomers**, Generation X* and Y
Rise of the emerging middle class who earn decent salaries and have
decent disposal incomes.
Service sector boom resulting in an emerging middle class with
increased spending power
Spending power of the upper class extremely high mainly due to
wealth from oil and gas and politics
BEHAVIORAL PATTERNS AND BENEFITS
Very fashion conscious people
Materialistic- product/brand focused as opposed to service- buy into
brands for a sense of belonging and for social status
Exposure and increased awareness of fashion due to advancements
in technology and entertainment
Increased interest in fashion as a result of local brands kicking off
the industry
Well travelled and aware of international brands
Culture plays a significant role in the buying habits of Nigerians-
‘Event-attending‘ society
Thursday, September 5, 2013

5. NIGERIAN FASHION INDUSTRY: !
KEY COMPETITORS
https://www.youtube.com/watch?v=rlwFiJiZ_tM
Price/Quality/Service/Image
Indigenous Designer Brands
Cut and Sew
Tailor-made fashion
Luxury Brands/
Ready-to-Wear/ Designer
Diffusion/Upper Bridge
Bridge
Mass Brands
INTERNATIONAL MARKET NIGERIAN MARKET
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12. NIGERIAN FASHION INDUSTRY:
PRODUCTION AND
DISTRIBUTION
PRODUCTION
Little opportunities for sourcing at this
moment
Almost no garment manufacturing capacities
Historically a cotton producer
Nigeria’s cotton, textile and garment (CTG)
industry has been experiencing a downward
trend over the last three decades
CTG industry was a key player in the national
economy in the 80s- employed 20% of
population (600,000 workers) with 170 textile
mills.
Was ranked 2nd largest textile hub in sub-
saharan africa
CTG industry suffering as a result of poor
infrastructure (energy), lack of technical
manpower, smuggling of cheaper/lower quality
textiles, high and uncompetitive cost of
production
Industry currently under reforms- $2bn
investment in industry in 2012
DISTRIBUTION
CUSTOMER SHOPPING PATTERNS
Gradual shift from tailor-made fashion
Growing retail culture in main cities
Purchase is usually event-driven and not
casual
Preference is towards multi-brand shops or
malls
Tendency to buy international brands abroad
during yearly vacations
DISTRIBUTION OUTLETS
No defined retail districts like in most
developed nations
Shopping malls becoming increasingly popular
Retail outlets located arbitrarily- Zegna located
on Commercial street, etc
Underdeveloped in terms of actual retail
experience
International brands mainly available through
multi-brand stores at extremely high prices.
Boost in E-commerce
Thursday, September 5, 2013

13. NIGERIAN FASHION INDUSTRY:
TECHNOLOGICAL ADVANCEMENTS
E-COMMERCE
E- Commerce 2 years ago, non existent but has suddenly seen a recent boom- Jumia, Konga- Mass brands
International companies now delivering to Nigeria- www.asos.com
INTERNET
Internet users increasing at extremely fast pace in the last 3 years as a result of smartphone and mobile data services.
Fashion bloggers and Fashion websites becoming increasingly relevant in influencing opinions
Indigenous brands using websites and blogs as a cheaper and more accessible method of reaching customers and providing
information and customers becoming increasingly dependent on these websites.
website: http://www.hautefashionafrica.com/ http://styljunki.com/ blog: http://www.onenigerianboy.com/
SOCIAL MEDIA
Social Media mainly used to promote brands as in developed countries. Instagram, Facebook and Twitter
Extremely effective means of marketing as smart phones are now commonplace
Thursday, September 5, 2013

14. ATTRACTIVENESS OF THE INDUSTRY
PROS
Attractive Investment Laws- NIPC Act-
Incorporation, business permits, quota positions,
tax and other incentives.
Large Market
High population of baby boomers
Growing local fashion industry- fashion weeks,
international press, etc
Good returns on investment
Lenient tax laws
Lenient processes and regulations
Low cost of labour and availability of skilled
labour
Timing- Early and therefore opportunity to gain
brand loyalty and market share
CONS
Lack of infrastructure- electricity, bad roads, etc
Risk of political instability
Undeveloped retail structure
Expensive properties in undefined retail districts
Different culture- time perception, etc
Relatively high standard of living
KEY SUCCESS
FACTORS
A suitable and competent local partner
Skilled sales force
Good Location
An strong understanding of the market and
culture
High brand perception and awareness in the eyes
of the Nigerian Market
Thursday, September 5, 2013

15. THANK YOU...
GRAZIE...
MERCI...
IMELA...
NA GODE...
ESE...
Thursday, September 5, 2013

16. TAIWO ABDULLAHI, DOING BUSINESS IN NIGERIA
HTTP://WWW.WORLDBANK.ORG/EN/COUNTRY/NIGERIA/OVERVIEW
HTTP://WWW.CORPORATE-NIGERIA.COM/ASSETS/PDF/2010/CN-2010-FDI.PDF
UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT
HTTP://UNCTAD.ORG/EN/PAGES/DIAE/WORLD%20INVESTMENT%20REPORT/ANNEX-
TABLES.ASPX
HTTP://LEADERSHIP.NG/NGA/ARTICLES/47914/2013/02/17/
REVIVING_NIGERIAS_AILING_TEXTILE_INDUSTRY.HTML
HTTP://WWW.BUSINESSOFFASHION.COM/2013/06/MARKET-GPS-NIGERIA-TAKING-AFRICAS-
GIANT-SERIOUSLY.HTML
SOURCES
Thursday, September 5, 2013