NielseN eMeRGiNG MARKeT iNsiGHTs • COUNTRY sNAPsHOT

NigeriaIt seems that every square foot of Lagos, Nigeria’s largest city, is put to use—for buying and selling, cooking, building, and living. The crowded, energetic activity here never stops. Purchases are made in stalled traffic and on congested street corners. Locals can find products ranging from food and clothing, to cell phones and tire irons right in the midst of the sprawling, bustling foot and car traffic. The “market” in Nigeria isn’t contained. It’s everywhere.

Country ProfileNigeria is a predominantly young country with 50% of its population under 20 years old. The literacy rate is as high as 72% and students make up nearly one third of the entire population. This young crowd is conscious about its lifestyle and looks. Personal care and apparel account for the second highest share of spend after food and grocery. Nigerians love entertainment as well—89% of households own a television.

Nigeria is home to over 250 ethnic groups, divided on religious, socioeconomic, and political lines. The northern part of Nigeria holds much of the Muslim population, while the richer Christian population tends to inhabit the south. The groups coexist uneasily.

In a remarkable break from its past, Nigeria now enjoys a democratically elected government that is keen on attracting foreign investment, an economy that is growing by leaps and bounds, and an emerging middle class that is confident and comfortable with trying new products.

With one of the highest literacy rates in Africa, along with substantial reserves of oil and natural gas, Nigeria is a solid bet for significant middle-class growth. At this point, however, development hasn’t quite reached the masses. The country still faces infrastructure bottlenecks, access to electricity, education and healthcare. There is also a high degree of inequality in income distribution. The top 30% of the population controls 80% of the country’s wealth. This leads to financial constraints, including price sensitivity and prioritization in consumption.

Despite the income inequality, socioeconomic change is affecting much of the population. For example, there is a large demand for organized banking services—74% of Nigerians are concerned about their financial future. So far the banking sector touches the lives of only 50% of the population.

In years past, oil was the mainstay of the country’s GDP, but over the last decade, Nigeria’s significant GDP growth has mainly been due to manufacturing, agriculture, and services. With its rich mineral resources and vast tracts of arable land, Nigeria has the potential to be Africa’s powerhouse. Decades of a corrupt government, internal fighting for oil reserves, and poor infrastructure, however, have left a major chunk of its population reeling in extreme poverty—an estimated 57% are below the poverty line.

Source: africaneconomicoutlook.org

NielseN eMeRGiNG MARKeT iNsiGHTs • COUNTRY sNAPsHOT

Nigeria

BuyTraditional channels dominate the retail landscape, but supermarkets are popular with the upscale segments. Excluding Connected Achievers and Empowered Individuals, consumers have little propensity to try new products. Food, personal care, and household products account for 37% of total monthly household spend.

Because affordability, recommendation and availability drive decisions in all groups, companies in FMCG and other consumer sectors would do well to introduce low-cost single-use packs and promotional pricing strategies into their product offerings.

WatchNigerian consumers spend a lot of their free time either watching television or listening to the radio. When watching television, Nigerians tune in to soccer games, Nigerian movies, family dramas and music. Print media and the internet are popular mainly with upscale segments—especially with Connected Achievers and Empowered Individuals.

Even though Nigeria is a developing country, about 90% of the population owns mobile phones. These phones, however, are mainly used for text messaging. Marketers who tap in to text messaging as an awareness and promotional tool can reach a huge percentage of the population.

OpportunityGrowth in Nigeria has been possible because of steps taken by the government to end armed conflicts and create a better business climate. In the past decade the non-oil sector, led by Telecom and Agriculture has been instrumental in driving growth across Nigeria. Despite a spurt in GDP numbers, the country is still largely an essentials market. Basic FMCG products have high penetration and high frequency.

Opportunities exist for higher end products for upscale segments. Launching a new product in this country of contrasts, would require a careful examination of the culture and needs of people across all segments.

The data and insights in this article were derived primarily from proprietary research conducted by Nielsen.Copyright © 2011 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies.

Focused Providers 19% Males, 25-45 yrs, Lower SEC

Product and service preferences are based on affordability and availability. Low brand involvement and willing to shift brands.

Connected Achievers 15% Males, 25-45 yrs, Upper SEC

Comparatively more affluent segment. High brand involvement; media consumption is relatively high.

Modest Youngs 15% Females, 15-19 yrs, Mid and Low SEC

More price sensitive, gives priority to branded products. Prefers the products on sale/discount.

Empowered Individualists 13% Females, 20-24 yrs, Low, Mid, and High SEC

Brand conscious & open to recommendations. Pay price premium for better products & services. High media consumption.

Traditional Conservatives 12% Females, 30-45 yrs, Lower SEC

Mostly price sensitive, not very open to trying new brands. Media consumption is remarkably low.

Evolving Conformists 11% Females, 20-45 yrs, Higher SEC

Not very open to trying new brands. Attracted by sales and discounts. Recommendations from friends affect brand choice.

Localized Conservatives 7% Females, 15-19 yrs, Low SEC

Most financially dependent group. Seeks affordable products due to price sensitivity.

Social Explorers 7% Males, 25-35 yrs, Middle SEC

Product choice depends on affordability. High brand involvement, not very willing to shift brands.

Nielsen identified eight consumer segments based on consumer research. Variables used were: Attitudes, Age, Socio-Economic Class, Education Level, and Mobile and Media usage. Some segments are traditional and family oriented while other segments are moving toward an urban, individualistic lifestyle.