Octagon Session: The Buy Nigeria conversation

Welcome To The Octagon.

We appreciate you taking time out to join this chat session. We have two moderators in the room who will only offer guidance where necessary. Please feel free to openly share your thoughts and experiences. Let’s begin with introductions. Can everyone let us know who they are and share a bit about what they do?

Thank You.

Ofili: I’m Okechukwu Ofili, a multipotentialite addicted to truth and allergic to bullshit!‬
Founder of ofilispeaks.com and okadabooks.com. Author of 4 funny books.

Bolaji: My name is Bolaji Iwayemi and i’m the marketing team lead for Paga, Nigeria’s No.1 payments company.

Daniel: Hi, I’m Daniel Emeka … Digital and Marketing communications| Rookie Tech Entrepreneur.

Gbadebo: Gbadebo Rhodes-Vivour – Architect and Creative director for Literati clothing‬.

Lolade: My name is Lolade Fadoju. I work within digital marketing for GTBank and head the SME MarketHub. It’s a pleasure to meet you all.

The Octagon: Thank you for the introductions.

Several studies have shown that when you buy from an independent, locally-owned business, rather than a nationally-owned businesses, significantly more of your money is used to make purchases from other local businesses, service providers, and farms — continuing to strengthen the economic base of the community.

Senator Ben Bruce recently started the #BuyNaijaToGrowTheNaira campaign.

In his words, “Obviously we cannot cut ourselves off from the world. No nation is an island, but at least we can fly Nigerian airlines, eat locally produced food and patronise our football league. If we do this, not only will our economy grow and produce jobs for Nigerians, it will also make our goods and services improve in value such that they will be attractive enough to be imported.”

Understanding the need for local content, Should we be creating localized versions of international businesses winning the Nigerian market.? How can we get Nigerians more comfortable with buying local and appreciating local businesses?

Bolaji: Quality plays a huge part in buying Nigerian. No matter how much I love my country I will not excuse mediocrity. Another issue is the fact that little to no manufacturing occurs in Nigeria. So when we “buy Nigeria” are we actually buying Nigerian.

Gbadebo: Currently a £20 pound T-shirt now costs 10k. I think at the rate we are going it would no longer be a question of making people comfortable. It would be people actively looking for substitutes‬. The onus would be on the makers to be able to fill that gap‬.

Bolaji: @Gbadebo very true but we need to change your perceptions first.

Daniel: Understanding the consumer and insights that drive their purchase behavior is key to creating good enough content for them to buy. I started www.ethnikcity.com on the premise that, a lot of Nigerians complain about failed processes when dealing with Nigerian artisans and manufacturers.

Ofili: But can they? Is the Government doing enough to help us grow. Doing business in Nigeria is very hard. Legal taxes are high and illegal taxes are higher aka omo onile‬.

Bolaji: @Ofili how do we by-pass the govt and “create our own destinies”?

Ofili: It’s difficult …with okadabooks we have minimum exposure to government. We are a software, and our office exists in the cloud.‬ But for manufacturing businesses, it is difficult. I watched my dad become a shell of himself trying to run a plastic company in Nigeria as an honest man. It killed him. The government took everything he had and gave him nothing. No light no power nothing. So it’s hard. LindaIkeji can thrive because it’s software same with Bellanaija. But when you start manufacturing physical products it’s impossible to dodge the government.

Bolaji: The cost of 3D printing is dropping. Imagine your Dad running his company at about half the cost. For food and some elements of clothing “buy Nigeria” is very alive.

Ofili: Agreed. But you still have to deal with government regulations. You have to transport. You need power. They will tax you etc.‬ In the US, you get tax breaks as a business. In Nigeria you get broken by taxes.

Bolaji: There are tax breaks in Nigeria. Pioneer status entitles you to 4 years without paying income tax

Ofili: Can you explain that term “pioneer status” I am not familiar with it.‬

Bolaji: Pioneer status – you’ve created something new in the market

Daniel: Nigerians will not buy from you because you are Nigerian. They will buy because your product fills a void. But from a branding perspective … the #BuyNaija causes trials. Retention is now what your product and service gives you.

Gbadebo: I think we need to separate consumers. The mass market does not care too much about where things are made. Mr Ofili wrote a brilliant piece about Made in Aba once‬. There was a time that the Made in Nigeria perception was a positive one‬.

The Octagon: Until recently when it became harder to purchase imported brands, it was difficult for Nigerian businesses to develop products to compete with these brands. The competition did give them little or no chance to break in. If dollar rates where low, how do we still convince the populace that buy Nigeria is important. Or is this conversation only important for tough times?

Bolaji: This is a very good point because once FX stabilizes people will go back to foreign products.

Ofili: Buy Nigeria is key and logical. It’s just that the quality has been lacking. I printed books in Nigeria and now I give them out for free because the print quality was bad. But hopefully companies like Printivo can break that cycle.‬

Gbadebo: Currently, to stem the effects foreign exchange has on our business, we have localized our production, especially the labor-intensive parts. Another thing to consider is the huge margins one can make by earning foreign currency with sales to the international diaspora‬.

Bolaji: The government has a very important role to play to create a conducive environment to manufacture locally.

Ofili: I don’t think so. If the quality is good, people will buy Nigeria. It’s quality. How do we get quality. ‬ A handy man has done the same job in my house 2 times, each time it was poor. If we somehow get our people to understand quality, it will help. And I feel it starts with our universities and technical colleges. The quality disrespect starts at that level.

Bolaji: I was watching NARCOS and thought that the model used was great to bring in Forex but the product was wrong.

Lolade: I believe every individual plays a role, not just government. Consumers demand good quality and competitive pricing. For a long time, several businesses survived by importing top quality to feed local demand. Of course, this has become more challenging with USD hovering around N400 and GBP north of N500 (would be north of N600 if not for Brexit ). Because of this, we are noticing some new trends with businesses trying to circumvent the FX challenge.
1) Some are importing MORE from other markets outside of the US and UK (eg, China, India, Canada, Turkey, Middle East).

2) Some are trying to start producing and sourcing locally.

Unfortunately, as everyone would agree, manufacturing is a major challenge. Seems a little like a chicken and egg problem, but my conscience still pricks me to support Nigerian businesses because I believe it is for the greater good. This means sometimes I will have stones in my rice or even a roughly finished seam in my clothing. But for me it is an ethical decision.

Bolaji: Very well said. However, quality is relative. A brand like Polo by Ralph gives a distinct experience that no local brand can give.

Ofili: The other thing I see is that a lot of businesses look to create products for Lagos and not Nigeria. So the quality products are priced and branded for one market.‬

Gbadebo: What we did in our case was to set up a 5 month experimental phase, sourcing the fabrics washing and testing them, then doing several samples until the tailors stepped up to the quality of finishing we expect. It is a costly process but we also have to consider that the quality of finishing and workmanship is a direct reflection of the ‘anyhow-ness’ that pervades our society…and most Nigerians don’t actually see what we call poor finishing as normal‬.

Bolaji: Hmmm research and development. Something that’s lacking here. Well done

Gbadebo: That’s what we did I don’t think it applies to every sector, but that was a solution in ours. Another thing is to go out of your comfort zone, I got that advice from The Octagon actually‬. So we went to Ikorodu‬ to set up‬.

Lolade: There is a woman by the name of Bethlehem Tilahun Alemu. She runs a company called Sole Rebels based out of Ethiopia. She has been used as a case study by the global trade community for her role in ethical manufacturing. She sells shoes that are made by marginalized communities in Ethiopia. Her products retail at Urban Outfitters in the US. Guess what…people buy them not because the finishing is perfect, but because they understand that there is an ethical obligation to supporting developing economies

Ofili: Devils advocate: do Nigerians need quality to survive or just a certain acceptable threshold. Because if you look at China their economy thrives not on super-quality.

Bolaji: Fantastic. In her case I’d say they are selling a story not particularly the products in themselves.

Gbadebo: The story is very important, especially for foreign markets.

Lolade: True…but at least they are selling both.

Bolaji: Bros we like to flex in this country, even if we are broke. Otherwise there’d be no market for fake Polos.

Ofili: And Nigerians don’t understand that ethical or logical need to support themselves. ‬I think it’s cultural. My mum will price everything in Nigeria to as cheap as possible but will buy foreign things without asking a question. That pricing mentality somehow affects our support of Nigerian businesses.

Lolade: The reality is, we cannot afford to live like we used to. Everybody must adjust, whether you like it or not. Lolade: My Mom would do the same. But at least shops directly from the market.

Daniel: Businesses in Nigeria will thrive on a good pricing strategy vis-a-vis a sustainable business (growth) plan. Businesses that enter the market creating top notch quality products, trying to compete with Polo and Chanel end up failing quickly cause they might not be able to sustain the growth. Ofili is right, consumers know where to go to “Quality” when they need one.

Gbadebo: I’m curious as to what GT market place has experienced re:retail trends‬.

Lolade: Well, I would say indigenous brands have benefited from these circumstances.

Gbadebo: We have a pricing culture.This formal market system and putting price tags on things…e never enter our body‬.

Lolade: People are extremely price sensitive these days so importers have had to grow smarter. We are seeing new brands creeping in everyday.

Daniel: ASOS started out selling very okay-to-wear clothes, but because the pricing didn’t hurt much, people did not mind. Today, prices of ASOS owned merchandize are now competing with global brands. As long as there is a growth pattern, Nigerians will understand. Take Techno for example – China Phone turn Samsung Junior.

Ofili: What is Paga’s experience like with the made in Nigeria concept‬? Congrats on cracking 5 million‬ by the way.

Bolaji: Thank You. Paga has several local merchants that we support. We are very proud to work with businesses like Printivo and Licious desserts that are addressing specific pain points.

The Octagon: There is the school of thought that well-finished and packageD products in Nigeria come at a higher production cost that will make sales price high and unable to compete with international brands. How do we address this challenge as well finished products also provides opportunity to export?

Daniel: You know why I love the brand Nigeria? Our diaspora market. They are touch points to our global market. Here is how we answer this question at Ethnikcity. We maintain our Nigerian target, but spread our tentacles to Nigerians in Diaspora. Even if mistakes are made (which through rigorous testing and quality control we try to avoid), our Nigerian consumers act as customer support, give us good feedback and we learn from mistakes. They become walking billboards for the brand and create word of mouth. Exporting products is a big deal and as a business, it can make or mar you, cause consumer reviews are not taken lightly when it comes to a global brand. The Nigerian brand is huge..very big…tainted but very very big. As long as we can answer specific problems, create solutions that works for people in general, (not places) customize it for local and global advantage…businesses win. Check out another selling point … the FX rates makes it easier for Nigerians in Diaspora to buy our product. You can buy and ship three shirts or more from us with $100 … but that’s the average cost of 1 good shirt over there.

Bolaji: Huge opportunity to bring in forex.

Gbadebo: I do think accessing finance is another factor that would help the emergence of quality made in Nigeria products. A reason why quality products are so expensive is The skill set required for it is hard to find, hard to keep and in high demand. Increasing the opportunities for skill acquisition is key‬. The opportunity is heavy. Especially because we are a people that despite everything are proudly Nigerian‬.

The Octagon: Should we be taking a cue from “Nigerian products” that have done well within and outside the country…Eg. Nigerian Music. Regardless of It’s quality compared to international music, it has a flavor and style that people are willing to buy consistently. How do we sell and tell great Nigeria stories? Should we leverage on our culture and heritage?

Gbadebo: YES. Every time we copy we always end up being poor imitations. We win when we create our own unique things and then you see foreigners even embracing it for its uniqueness‬.

Lolade: I agree

Daniel: Our sports stars, music and movies have led the way and we can leverage off them. We have Nigerians making it big like Jidenna, Wale etc. But the problem we face is branding. No Diss but, there is no mistake why wizkid will do better than MI. Wizkid brings in culture Naeto, Terry the Rap man, Ill Bliss providing imitations to what is done right globally.

Gbadebo: We have so many stories to tell and so much to pull from in terms of inspiration. he Japanese did it with manga as well, and who can deny the end part of that Jidenna song ‘ a little bit more’.

I think branding is a factor of access to finance to be able to afford people that can get branding right. With the huge opportunity to bring in Forex it would be great to see banks partner with SME’s‬ to access these markets‬. (Ms GTB tell your people).‬

Daniel: I beg to differ. Branding is tone of voice, not the amount you spend on media. Branding is what you tell people you are and stick to it. Do not shift because Ralph is making millions and you are raking in the hundreds.

Gbadebo: I agree….but if you can’t afford to print those customised boxes and get that soft white paper, and build a beautiful website. Branding also ties to packaging .It helps, especially when people want to buy your product as a gift for others‬.

Daniel: Who customize box help? Remember Toyota Ad back in the day – “Good Thinking, Good Product”. Ethnikcity is barely two weeks old, we’ve sold fifteen clothes, 75% re-order from customers and no single branding, even on the nylon.

The Octagon: We will be ending this conversation in 5 minutes. Please share your last thoughts on this. Thank you.

Bolaji: Quality and perception are key to selling and buying Nigeria

Daniel: Buying Nigeria is all well and good, but remember, certain socio-economic factors might affect product quality and delivery. Businesses need to plan based on available resources, create products anybody would love to have and wait for the magic to happen. No pressure, we will get there one day.

Gbadebo: Our current dilemma provides us with an opportunity to creatively gain market share locally and with our diaspora…We need to embrace this challenge and produce high quality products that people would happily substitute with the now more expensive options…‬

Thanks for joining us.

Visit www.theoctagon.com.ng to read more conversations. Follow @theoctagonroom to engage in the conversation. If you’re passionate about a subject, and would like to be part of the Octagon Panel, send us an email at [email protected].

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