As a thought leader in Nigeria’s retail revolution, Michael Chu’di Ejekam watches the sector with a keen eye. As of late, many supermarket giants have turned their attention to Africa, hoping to become established and take advantage of the blossoming market. Out of the top 100 markets, Africa and the Middle East accounted for just 12% back in 2012, but by 2013, the number jumped to 15%, and by 2015, the regions were home to 16.2%. In this article, the Michael Chu’di Ejekam Blog will examine several huge supermarket chains that have decided to center on Africa for growth, and explain why they’ve decided to do it.

Wal-Mart aka Massmart

At a recent summit in Cape Town, Wal-Mart CEO, Doug McMillon spoke about his overall goals for the company. “So sometimes people say Walmart is not really a growth company anymore. I want to say: Well, if we layer on $50 to $60 billion, would that count, in three years?” While Wal-Mart and its various subsidiaries are active on a global scale, McMillon says that they plan to put a broad focus on Sub-Saharan Africa. “It’s not only South Africa,” he said. “The whole region has something to offer.”

Pick n Pay

“By any metric, this is the best time to be in Africa,” explained Richard Brasher, CEO of Pick n pay, at the same consumer goods forum. “You can’t hope to control Africa or anything that happens in it, but what you can do is learn to adapt.” The company operates in Botswana, Lesotho, Mauritius, Mozambique, South Africa, Swaziland, and Zambia. Brasher said that one of the keys to success is recognizing that consumers in different countries have unique needs and preferences, and that businesses must adapt to them. The company’s present goal is to expand into Nigeria, but with a mix of both small and large shops to suit the needs of individual communities. His conviction unwavering, “We have ambitious plans for this continent, and we believe there’s a bright future,” Brasher added.

SPAR International

Self-dubbed as the “world’s largest voluntary retail chain,” SPAR has been very active in Africa for a number of years. The company opened its first Cameroon store near the end of last year and plans to continue growing its footprint in Africa in the coming years. SPAR recently ranked seventh on the list of growing retailers in Africa, after seeing more than a 10% increase over the course of a year. It also boasted the fourth-greatest sales in the region.

With the growing middle class and increasing urbanization, consumers are beginning to appreciate a more formal shopping environment. The population is also expected to double by 2050, reaching more than 2 billion people. As the market and need for more shops continues to boom throughout Africa, it will undoubtedly prove a wise a fruitful decision for these retailers to lay down roots now.

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Michael Chudi Ejekam is known for his work in the retail development sector throughout all of Africa. He has had a hand in numerous projects, often with a focus on Sub-Saharan Africa and his motherland of Nigeria. AT Kearney recently published its African Retail Development Index and rated countries based on various aspects, such as market attractiveness, country risk, market saturation, and time pressure, to determine which ones were the most desirable for retail development. Which ones came out on top? You’ll find the answers below, in this Michael Chudi Ejekam blog.

1. Gabon

The prior report listed Gabon as number five, but the recent increase in growth helped it earn the top spot this time around. According to the report, Gabon has the most stable middle-class, and one of the highest per-capita income levels of any Sub-Saharan nation, which sits at around $21,000. Moreover, newcomers to the market don’t face serious struggles due to heavy competition because it’s just now beginning to blossom.

2. Botswana

For similar reasons, Botswana climbed from number eight to number two on the list this year. The country has a very diverse economy, drawing revenue from mining, agriculture, and tourism. It’s a natural place for retailers to head to, and many of the big players in retail have become well-established already. Choppies, for example, has more than 70 locations there. This makes it more difficult for a newcomer to get established, though companies with a unique proposition or product still do well and the market continues to grow.

3. Angola

GDP growth makes Angola a very attractive place to do business. In these terms, it’s one of the fastest growing areas, with a 7% annual increase. However, it is still small (approximately 1/8 the size of Nigeria) and the middle-class population is nearly non-existent. Businesses that do well in Angola recognize this, and tend to cater to only the affluent Angolans or the very budget-conscious consumers.

4. Nigeria

Despite economic struggles, Nigeria remains a powerhouse for retail development. The population is massive, plus the middle-class is large and growing. Many citizens still favor local shops and small outlets, but the increase in urbanization is changing this as well. Numerous malls have been constructed and big companies like Shoprite have put down roots. Companies that do very well right now are catering to the loyalty of Nigerians, and are using locally-sourced goods whenever possible.

These four countries beat out all others, including South Africa, in terms of desirability for retail development. As time passes, we’re sure to see great things emerge from these markets, and positive results from those who enter them with a sound business plan.

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Three Tips to Make Your Nigerian Retail Venture a Win

Michael Ejekam has experience choosing the best retail ventures throughout Africa and America. His experiences have served him, the companies he has represented, and individual investors well. This has also helped Michael Ejekam become known as a thought leader in the Nigerian retail revolution, but some of the expertise comes from watching what’s happening in other parts of the world, and knowing which business strategies help businesses succeed in unique economic environments. The retail industry in Nigeria is still strong and a good opportunity for entrepreneurs, but it’s important to include the following three things into your business plan as you start your retail company.

1. Be Prepared to Stay

“Make very sure Africa is where you want to be,” advises Christo Wiese, Chairman of Shoprite Holdings. He’s South Africa’s richest man, and weathering the conditions is easier for him, but he makes a fine point. All too often, new businesses are not prepared to accept losses with their gains. There will be times when business is slow, and smart entrepreneurs allow for this in their long-term strategies. When they come unprepared to stay, they exit the market quickly.

2. Take Advantage of Ecommerce Opportunities

The people of Nigeria love online shopping,  more so than the people of other nations. Only 60% of Kenyans use the internet for shopping, and in South Africa, the number climbs to 70%, but here in Nigeria, a massive 90% of the population shops online. Throughout the world, we are seeing a unique mixture, where businesses are providing a seamless experience from online stores to their physical locations. Managing Director at Netplusdotcom, Wole Faroun, says that the key is in incorporating point of sales (POS) systems and using them. Consumers can take advantage of being things online, but they also use systems in places like the movies, when they make use of a kiosk to purchase tickets and avoid a line. There are also companies like Amazon, that operate primarily online, but are branching out into small satellite stores, to generate more awareness for the brand and so people can experience the merchandise firsthand. “When you look at point of sale holistically, and as an e-commerce player you begin to see opportunities where you were not playing before,” explains Farun, “and if you start playing in those areas, you’ll see that there’s a win.”

3. Use Locally-Sourced Goods

Forex shortages have affected retailers quite a bit, but they haven’t affected all Nigerian retailers “A lot of retailers have been able to adapt, and some that initially pulled out have come back into the market,” says Obinna Onunkwo, a co-managing partner at Purple Capital. “Those of them that had the foresight to look for local alternatives, or local producers are doing relatively well – those that were not able to make that transition are doing badly.”

Michael Ejekam understands the retail environment in Nigeria and still believes this is a good time for people to begin a business, but also adds that much of one’s success has to do with the strategy a business creates. Although these three tips may not be a comprehensive strategy for success, it’s a good start for anyone looking to get into the game right now.

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Through the years, Michael Chu’di Ejekam has had a hand in the development of several malls throughout Nigeria and Africa as a whole. These retail spaces aren’t just a sign of a growing economy, or even of improving lifestyles for people. For Nigeria’s unemployed young workers, they may be a sign of hope. This Michael Chu’di Ejekam blog explores the unemployment issue in Nigeria and how retail just might be a key piece in solving it.

A “Society in Danger of Destruction”

Not too long ago, the president and CEO of Dangote Group in Nigeria used that phrase to describe the difficult employment situation. Aliko Dangote spoke out about the dangers associated with unemployment in a 2015 editorial, which served as an open letter to the Buhari administration. Referring to youth unemployment (up to age 34)  as “the monster that has kept our teeming youths on the fringes of human existence,” he called for the administration to “slay” it. “Our entire society is in danger of destruction unless we pay attention to this huge segment of our young and jobless global population,” he added. Around that time, youth unemployment rested around 50%, an astounding level that no doubt contributed to countless other issues throughout the country.

Retail Could Help Break the Cycle

Naturally, as the population grows, so, too, does the unemployment rate. The good news is, retail could play key role in reducing youth unemployment throughout the country. Broll Nigeria recently held a roundtable discussion called “Retail Industry: 10 Years from Now,” and the industry experts concluded that retail could be the biggest employer of youths in the coming years. Bolaji Edu, CEO of Broll Nigeria, offered further insights into the industry. “Despite a challenging environment,” he said, “Nigeria still holds promise for investors who are willing to take a long-term approach on investments.” However, the government will play a large role in whether retail continues to expand and create jobs. “The outlook for the retail sector is largely dependent on economic reforms as well as the lifting of foreign exchange restrictions,” Edu added.

So, although retail may not be a magic bullet that slays the beast, it very much could be with the right governmental procedures and policies in place. This would not only impact the Nigerian youths of today, but will build for a better future for the country overall.

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Michael Chu’di Ejekam has been involved in the creation of several malls, including the Ikeja City Mall and the Jabi Lake Mall, as well as the Abuja and Accra Malls. These kinds of projects are always exciting, as they show that investors have faith in the economy and they bring jobs and growth to the area. Although Michael Chu’di Ejekam was not involved in the newest mall to open in Lagos, Nigeria, it’s still good news for local residents.

The Maryland Mall is Open

Onikepo Akande, President of Lagos Chamber of Commerce and Industry (LCCI) spoke at the inauguration celebration. “It is my sincere belief that this new mall will help to expose and grow the manufacturing and commercial potential of Lagos state and by extension, the national economy,” she said. Anchored by a Shoprite store, with many other venues for entertainment, shopping, and services, the location is expected to do quite well. Many businesses are eager to take up slots in the 7,700 square metre property, including companies like Stanbis IBTC Bank and The Place restaurant. Akande gives credit to the team behind the new development, explaining, “Indeed, retail is one of the cornerstones of trading and investment, and Purple Capital, the developers of Maryland Mall, have done extremely well to give Maryland a new lease of life through this retail investment.”

It’s a Unique Structure in a High-Volume Area

The Lagos State Ministry of Transport carried out studies of the area, highlighting traffic patterns and the best way to position things. It’s estimated that 5,000 cars will pass by every single hour, which will bring people naturally to the mall throughout the normal course of their days. Unlike most structures being built today,  the Maryland Mall is built lengthwise, rather than reaching into the air. It also boasts a few unique features, such as an underground parking lot, which is the first one in the country. Developers has also included a massive 550 square metre LED screen on the front of the building, which is the largest in all of Sub-Saharan Africa. It’s estimated that the structure cost some $25 million to construct, and took roughly three years to bring to fruition, from the early investing stage through opening day. So far, it has been well-received by local residents, who have largely been treating visits as a family outing and appreciating the nice cool air conditioning.

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Being involved in commercial real estate and retail investments, Michael Ejekam is constantly watching the market to see which companies are performing well. While knowing which ones are profitable and are at the top help in knowing where to invest, watching companies as they climb the ladder is essential. This can give you keen insights into which strategies work, as well as what products consumers are demanding. The Michael Ejekam Blog has gathered information on ten of the fastest-growing companies in Africa’s retail sector, with statistics from Deloitte.

1. Choppies Enterprises Ltd

Headquartered in Botswana, Choppies is the fastest-growing retail company in Africa and also ranks 12 in terms of sales. Their sales jumped up 24.4% during the reporting period.

2. Zambeef Products Plc

Aptly named, Zambeef hails from Zambia and fell just behind Choppies in terms of growth during the same reporting period. An increase of 23% in sales brought the company to 20 on the total revenue list.

3. Mr. Price Group Ltd

The South African clothing and accessories retailer, Mr. Price, gained 15% in sales over the course of the year. This landed them in seventh place in terms of sales.

4. The Foschini Group Ltd

Another South African purveyor of apparel, The Foschini Group, took fourth on the fastest-growing list, with revenue climbing 13.3%, but topped Mr. Price in terms of revenue by one slot.

5. Woolworths

Internationally-known Woolworths took fifth place in both growth and total sales. The clothing company is headquartered in South Africa and grew by 12.7% during the reporting period.

6. Société Magasin Général SA

The only Tunisian company to make the list was Société Magasin Général SA, a general merchandise venue, showing steady gains of 11.3% and earning the 16th slot in terms of sales.

7. The SPAR Group Ltd

Though the SPAR Group of South Africa holds the fourth spot in terms of total sales, it only came in seventh place for growth. However, a comfortable 10.7% increase for such a large company is commendable.

8. Shoprite Holdings Ltd.

Another large South African company, Shoprite, came in eighth place for growth, showing a 10.5% increase. However, it beat out all other companies for sales.

9. Massmart Holdings Ltd

Massmart, headquartered in South Africa, fell just behind Shoprite on both lists; coming in number nine for growth at 9.8% and taking the second spot for sales.

10. Furnmart Ltd

The only home furnishings retailer to make the top ten is Frunmart, with 8.9% growth. The South African company comes in 23rd for overall sales.

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