Indomie Noodles continues to close the flanks from any level of competition. We are learning that it is working with Tala, a U.S. fintech, to offer credit to enable people buy its products. Do not take this strategy for granted: if the minimum wage in Nigeria for federal workers puts them at about $2.80 per day wages, expect the national average to be around $2 per day. With that, even a 50-cents (N180 naira) single pack Indomie noodles could be expensive to most people. To deal with that, Indomie wants to offer a credit package that ensures that no other person gets into the lives of its customers. It can do this by financing micro-entrepreneurs who then become agents to market Indomie noodles. Of course, end users can be “micro-entrepreneurs”; it only requires volume to qualify.
Tolaram Group, the Singapore-based manufacturer of Indomie, Nigeria’s most popular noodle brand, is planning to tap opportunities in the lending space in Nigeria and the rest of Africa with the launch of Tala on the continent, according to a source very close to the matter. Tala is a US-based fintech company that offers uncollaterised loans.
In the Indomie Noodles Strategy, I have written how this company has used Sun Tzu strategy as articulated in the Art of War to close all flanks, making it hard for Dangote Noodles to find opening in the noodles business; Dangote Group later sold the business to the makers of Indomie. This credit offering is something along that line: I have closed all flanks in operations through a vertically integrated operations, and I want to ensure that my customers revolve around me, and I will give them credit to buy my products. That is a 360-degree closure.
The discussion continues in our Tekedia mini-MBA where we are studying the business of Indomie Noodles as one of our six weekly flash cases (you can register and join today).
Register for Tekedia Mini-MBA (4 months, online, costs $140 or N50,000 naira ). Class in session, registration ongoing.