How To Strategically Enter The FMCG Market In Nigeria?

Nigeria has the largest population in Africa with over over 213 million people in 2023. The population is forecasted to continue growing and potentially reach 377 million by 2050!

Nigeria also has an abundance of natural resources resulting in a growth of GDP of 3.11% year-on-year, which presents a considerable opportunity for Fast-Moving Consumer Goods (FMCG) brands. The FMCG industry is a major driver of the Nigerian economy - ranking sixth across major industries, where 70% is driven by food and 30% by non-food products.

Three reasons that make Nigeria a promising investment landscape:

Lagos, Nigeria Cityscape Credit: Google

• Growing Population and Demand: The fast-growing population is leading to increased demand and a dynamic change in consumer needs. In consequence, retail sales in Nigeria are expected to surge by 27% between 2022-2027, reaching $160 billion.
• The Demographic Advantage: Nigeria's demographics include a sizable youth and working-class population, along with a growing urban middle class. Therefore consumer demands are becoming much more sophisticated - from health-conscious decisions to higher-quality ingredients.
• The Economic Diversification: Lastly efforts towards economic diversification and infrastructure development are enhancing the overall business environment.

Challenges:

While Nigeria presents an attractive market, FMCG importers face a number of challenges that require careful planning, adaptability, and a deep understanding of the local business environment.

• Foreign Exchange Challenges: Foreign exchange shortages and volatility are challenging for importers with international investments.
• Lack of Infrastructure: This includes storage facilities and unreliable transportation networks, contributing to logistical challenges faced by FMCG importers.
• Regulatory and Compliance Requirements: Consumer products in Nigeria are highly regulated, making it difficult to comply with The National Agency for Food and Drug Administration and Control (NAFDAC), and going through the process can be time-consuming if you're not aware of the right requirements.

In order to succeed in Nigeria's FMCG sector, it is necessary to combine effective risk management, compliance with evolving regulations, and strategies to mitigate the impact of economic volatility. Therefore, it's advised to have a team of local experts who are well aware of all the dynamics and challenges.

IMAGINE FMCG - Market Entry Strategy

IMAGINE FMCG has extensive experience in Emerging Markets, such as Nigeria, where we've gained our expertise through years of learning, to guarantee the success of our partners. Our local presence and network provide us with invaluable market insights and knowledge. And we continue to collaborate with key FMCG stakeholders, on the ground, who understand what our clients need, so we can tailor the right strategies and ensure success.

Also, we are well-equipped to offer market entry support, connect you with potential partners, supervise the distribution, and provide on-site assistance for commercial management. This offers our partners a cost-efficient approach, which not only saves our partners time and resources but also ensures their success by leveraging our local expertise and network.

If you would like to find out more about the support we can offer you, please get in touch via info@imaginefmcg.com

-Lisa Laouiti, Commercial Director (North + East Africa, India), Imagine

–Mirfat Khamis, Digital Marketing Specialist, Imagine