Hacking Nigeria’s FMCG supply chain
by Louise Burgers. The retail industry is one of the most durable industries on the continent, says Ruke Awaritefe, TradeDepot co-founder.
by Louise Burgers. Ruke Awaritefe is co-founder and chief business officer of TradeDepot. With a network of over 40,000 micro retailers across Nigeria, he wants to build the largest retail distribution network in Africa. Awaritefe is a serial entrepreneur who also co-founded C2G Consulting, a technology consulting practice which he bootstrapped to become the leading SAP Partner in West Africa by 2013. With TradeDepot, he intends to transform the FMCG supply chain in Nigeria – connecting global brands to street traders; and providing vital brand research.
Founded in 2016, TradeDepot, in a nutshell, “is an end-to-end distribution platform that aims to connect the world’s top consumer goods companies directly to informal retailers on the streets of Africa’s cities”. Top performing consumer goods brands are only available in less than 30% of outlets in Nigeria. TradeDepot also provides data (that to-date simply hasn’t existed) such as route-to-market and demand planning data. They are now also providing credit facilities to retailers in its network through its ShopTopUp platform. Being informal retailers, many cannot access credit facilities because they don’t have the collateral that banks demand. However, by leveraging their trading relationships with TradeDepot, retailers can now access the funds they need to buy more goods, scale their businesses and generate more revenue.
Awaritefe talks to Retailing Africa about the year to come and what retailing conditions will prevail on the continent:
Where is your market status now, in terms of recovery and volume?
The pandemic has triggered a challenging economic climate for many businesses across Africa. The restrictions on movement, as well as the inflation that has happened in many economies across the continent, has driven a change in consumer behaviour which has impacted many retail store owners. With people generally more hesitant to mingle in crowds, we’ve seen many retailers exploring alternative avenues of connecting with the stock they need for their store, especially going online. Retailers have been able to take advantage of the flexible and convenient service we provide to ensure that their stores are well stocked to serve their communities. As a result, demand for our services has increased by five times and we’ve seen a 300% increase in transaction value and volume on the back of the pandemic.
What have you noticed about changed consumer behaviour?
At the moment, our main market is Nigeria and the impact of border closures, rising inflation, forex availability issues and other challenges have led to rising cost of living and lower earnings for many across the country. This combination has made many people more frugal with their purchases and we’ve seen a rise in demand for necessities such as food and groceries over luxury goods. The pandemic has also presented an opportunity for store owners to increase their turnover and improve business performance. As people spend more time at home and keep things relatively local, store owners have a more pivotal role to play in providing access to essential goods.
What has challenged you the most over the past months?
We work in a market where customers are only loyal until they find the next good deal. Many retailers are even ready to ignore major inconveniences to access the best deals for their stock. So for us, we have to make sure we continue to provide the best value for money along with the unique customer experience that we offer. The last few months have been tough for many of our customers but what we’ve also seen is a resilience that has seen so many turn a challenge into an opportunity. Challenges with infrastructure and logistics still exist, which make it more difficult to reach many store owners, especially those that operate in remote locations. As a company, we are committed to making the process of accessing supplies more convenient for even the most remote store owners and making it easier for them to run a successful business, and it is great to see store owners responding to that.
What does your market segment need to do to in 2021?
More support from government and public institutions to bridge the infrastructure and logistics gaps would be useful for catalysing the impact private sector players are having with retailers. More financial services for retailers – such as savings, loans and insurance – would also make it easier for store owners to meet the demand of customers and grow their businesses.
What is your prognosis for the marketing and retailing industry for 2021?
The year 2020 has highlighted the retail industry as one of the most durable on the continent and we anticipate a rise in products and services to help consolidate and improve the industry. There could be more competition higher up in the value chain with more platforms springing up to address logistics issues and provide auxiliary services like goods packaging and processing, etc. There could also be more value added services such as financial services for distributors, retailers and consumers in the retail industry.
Louise Burgers is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.
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