Nigeria’s growing children population which is rising at 2 million kids per annum represents a huge market for investors and retailers.
The number of children in Nigeria aged between 0 -14 is put at 85 million, according to data from United Nations Children’s Fund (UNICEF).
Tunde Olatunji, CEO of Homekids a kid’s toy store in Surulere told BusinessDay that the children’s market is too large to ignore.
He said for years he has been selling toys for kids, and sells some 5000 – 7000 pieces of his goods monthly in six states where his stores are located.
Despite new entrants flocking into the market Olatunji remains optimistic about his business.
“There is still an opportunity, for Nigerians to establish themselves, by using local knowledge to tap into the growing, diverse and increasing middle class,” Olatunji said.
For foreign retailers, thinning margins in the developed economies coupled with slow economic growth has made the search for new markets imperative.
According to data from research firm Euromonitor, between 2011 and 2016 developed countries saw toy sales grow just by 1 percent compared to Africa which grew at 13 percent.
A research conducted by American research company Trend, reiterated that Nigeria is the largest kids’ market in Africa and the second-fastest growing market with a forecast of double digit compound annual growth rate (CAGR) through to 2022.
It predicted that over the next five years, the market in Nigeria will transition from a large emerging market to West Africa’s largest mass kids’ premium market.
Also another report released in July by research firm McKinsey Global Institute, said Nigeria’s consumption could rise to $1.4trn a year by 2030, from its present level of $388bn a year, an average annual increase of 8 percent.
This it said will be driven by 35m households earning more than $7500 a year by 2030, which would greatly expand the middle-income bracket.
The report stated further that the increased affluence is expected to result in 7.1 percent annual growth in consumer goods sales.
The rise of non-food goods such as personal care products will record an even sharper rate of growth, with sales rising by 10.6 percent a year through to 2030, compared to 6.8 percent for food.
Kids market is an emotive market, and lifestyle plays a role in it says Kenneth Morka a lecturer at the Delta state polytechnic department of marketing Ogwashi-uku.
“Emotion is a very important aspect of marketing, a parent would rather buy for his or her kid than buy for self, it is nature, and this present a huge market for domestic retailers to harness,” Morka said.
“There is no time to spare entering these markets for serious investors because the first movers gain an advantage as they can comfortably establish their brands early and secure loyal customer bases,” he said.
Meanwhile, Nigerian cities dominate the top 100 Africa biggest markets with capital, consumer size and connectivity, ahead of Egypt and South Africa, according to the May 2017 Fraym Urban Markets index report.
37 cities in Nigeria made it into the top 100, with Lagos, Abuja, Kano, Ibadan and Port Harcourt ranked in the top 25 at 3rd, 17th, 18th, 19th and 22nd respectively ahead of South Africa 9 and Morocco 8.
However, top of the list overall was Egypt’s capital city Cairo, followed by Johannesburg (South Africa), Lagos (Nigeria), Luanda (Angola) and Democratic Republic of Congo’s Kinshasa.
Egypt Cairo ranked first both in Consumer, Connectivity, and Capital, Nigeria Lagos unsurprisingly came in second on consumer level followed by Congo Kinshasa with South Africa fourth.
South Africa also had four cities including Durban at number 13, Vereeniging, a city in Gauteng province, South Africa, and Cape Town at position seven as Egypt had also Alexandria, the Mediterranean port city which came in at ninth position.
Interestingly, the metropolis of Lagos has roughly the same-sized urban consumer class (12.2 million) as all thirteen large cities in the East African Community (12.5 million in Burundi, Kenya, Tanzania, Rwanda and Uganda).
The consumer class in Nigeria’s 37 cities of 41.6 million was mentioned as the largest in the report.
DAVID IBEMERE
