The retail sector in Nigeria is still informal and predominantly offline. Unlike B2C eCommerce startups that allow consumers to order items from their favourite marketplace and have it delivered at their doorstep, mum and pop stores do not have this opportunity up until now.
With digitization inching into every industry of the Nigerian economy, the retail sector cannot be left out. As such, there is a huge opportunity here because the thousands of retailers, supermarkets, mom and pop stores and food chains across Nigeria need to be brought online.
The Nigerian food & grocery retail market which is just a slice of the retail sector had total revenues of $45.7bn in 2020, representing a compound annual growth rate (CAGR) of 5.8% between 2016 and 2020. The food segment was the market’s most lucrative in 2020, with total revenues of $35.1bn, equivalent to 76.9% of the market’s overall value. This is according to a report by Marketresearch.
For Mckinsey, the management consulting firm says in a recent report titled Africa’s growing giant: Nigeria’s new retail economy that “the next chapter of emerging middle-class growth will be in the retail sector. Fueled by a new generation of Nigerian consumers, wholesale and retail sales are already the third-largest contributors to Nigeria’s GDP, contributing 16 percent to the total, albeit mostly through informal markets.”
The undeniable fact here is that if these retailers have an online presence, the revenues will more than double.
Wabi Nigeria, an e-commerce platform that is a subsidiary of Wabi BV, a joint venture between the Coca-Cola company and Coca-Cola Hellenic Bottling Company, is the leading startup that is digitising Nigeria’s informal retail sector.
Through Wabi2B, Wabi Nigeria is offering FMCGs a platform to sell all their products directly to the traditional trade stores through multiple channels and allowing them to know each customer. On the Wabi2B, retailers can also seamlessly order for their goods instead of going through the stress of visiting markets to get these goods. Wabi promises to deliver goods ordered within 24 hours.
The objectives of Wabi Nigeria is to digitize the traditional trade channels and basically help the small business owners to have the same leverage that the big e-commerce platform has by giving them the opportunity to buy and sell online.
Commenting on why Wabi is key to helping retailers come online, the Country Manager of Wabi Nigeria, Omolara Adagunodo said: “Last year during COVID-19, lots of Mom and Pop shops were at a huge disadvantage when people did not want to go out to buy groceries. What we are doing at Wabi is helping the traditional business owners, small businesses, the small neighborhood grocery shops, the Mom and Pop shops that would buy groceries to remain in a digital network because we believe that the future is digital. We do not know what is coming next after COVID-19.
“We have continued to engage them. We do not sit in the office and expect a solution. We have our field sales representatives (Wabi Hunters) and freelancers (Wabi Rangers) who interface daily with the customers to educate them and take feedback on the spot to provide solutions. We also maintain WhatsApp groups for all the traders depending on their locations for better engagement and day-to-day announcements from our FMCG Partners.
“But, whatever it is, we want to make sure that retail outlets are able to play online the same way as online business giants. So, they are not at a disadvantage when people are purchasing online.”
One thing that cannot be overlooked in bringing retailers-who are mostly women- online are their level of education and access to the internet.
Adagunodo says that these are not challenges for Wabi because “Lots of our customers have mobile phones and the ability to download Apps. We have however encountered those who do not, and have to rely on their neighbours to place their orders to be delivered to their shops.
“So, everyone is included. When we had set out, we had only included those with smartphones, but with the discovery of those who had no smartphones asking help from their neighbours, we developed the agency model to support them.”
On plans for Wabi Nigeria, Adagunodo said that Wabi’s immediate focus is to grow across all neighbourhoods in Lagos. Next year however, Wabi will be expanding to other cities across Nigeria.
The retail sector in Nigeria has huge potential and Wabi Nigeria is already positioned to bring retailers online as Wabi has created a platform that connects wholesalers with retailers. Retailers can download the Wabi2b App on the Google Playstore to start ordering from their favourite wholesalers and top FMCG companies in Nigeria.
