This is my playbook: Rwanda, Gambia and most less populated African countries are not great places to launch a business to consumer (B2C) startups except in healthcare and broad food areas. In those countries, I only get interested if the company is in the business to business (B2B) space. I do think the population is small to provide numbers which can enable leverageable factors to compound towards scaling a business. In other words, in those countries, B2B could work but B2C will struggle as the scalable advantages are severely limited.
But when it comes to Nigeria, Kenya, and South Africa, anything is possible. You can launch a B2C or B2B because they have the numbers.
Now, you want to do business in the B2C space in Nigeria, the question is “where do you position the company”? From multiple data, the best range and the most promising is to target people making $4 — $8 per day. That income band holds the highest concentration of discretionary spending power in the nation. That is where Ariel, Cowbell, Bigi Cola, La Casera, and other resilient brands in Nigeria operate.
Interestingly, that is also where I see a big percentage of my popular 30 million people who earn relatively decent income in Nigeria; those 30 million are the core of the consumer market.
Now what if my product optimally should be in the range of $10 per day-consumer? Solution, go sachetization where you break the pricing in bands, making it easier for people to pay for what they can afford. We practice this; explore that in your business as Nigeria continues to recover from economic paralysis.
That is why you have Tekedia Mini-MBA (N90,000); with Homework review (add N10k), with Capstone (N20k), etc. We practice what we teach! Pricing-democracy, you come in at the size of your purse!
This may not be far from what The New York Times called premiumization.
Comfort Plus. Fast pass. Main cabin extra. Most of us are familiar with a corporate lexicon that gently coerces us to shell out for a little more legroom, free shipping or lower wait times. But the trend is now growing voraciously beyond airlines, The New York Times reports. A broad swath of America’s biggest companies want to exploit a buzzy new corporate catchphrase: “premiumization.” The paper notes that with soaring inflation testing many people’s spending levels, companies are aggressively targeting their affluent customers with the means to pay more.
The current earning season was dominated by talk of “premiumization,” The Times notes, with almost 60 earnings calls and investor meetings mentioning it over the past three weeks.
As more products become prohibitively expensive to more people, it’s more likely that “poorer consumers will be increasingly underserved.”
Tekedia Mini-MBA edition 13 (Feb 5 - May 4, 2024) has started, join Prof Ndubuisi Ekekwe and our global faculty here.