Let me share this video to further explain my post on winning in Nigeria. Simply, here is the summary: you either target the top 30% or the bottom 40% as the middle class is disappearing. Eko Hotels charges N600,000 per night and remains fully booked, telling you how things stand.
In 2021, “the most significant opportunity for African B2C startups lies with consumers who earn between $4 — $8 per day … This is largely because that income band holds the highest concentration of discretionary spending power on the continent, as the graph below shows.”
Today, there are not many people who earn $4 per day (about N180,000 monthly) in Nigeria. So, the B2C best spot is largely gone, and that means you need to re-price and re-package for $2 per day. Where that is not possible, re-create the products to target those earning more; N1 million monthly will be a great point.
Let me share this video to further explain my post on winning in Nigeria. Simply, here is the summary: you either target the top 30% or the bottom 40% as the middle class is disappearing. Eko Hotels charges N680,000 per night and remains fully booked, telling you how things… pic.twitter.com/OtCyxH5DK0
— Ndubuisi Ekekwe (@ndekekwe) December 22, 2024
Video credit: Arise
Cases From Hotel To Banking
Video #2. Yes, if Eko Hotels now charges N680k per night for a room that used to go for less than N200k and still get all the rooms paid for, you need to understand the evolving strategy in Nigeria. And that strategy is to focus at the edges of the gaussian distributed market segments as the middle class may not add a lot of value. Even local airlines are doing just that. You can also add your bank as they now focus on the blue chip companies, and make tons of money from them, in this era of high interest rates when the middle of the road SMEs are left to themselves.
Think deeper into your pricing strategy as you readjust your market segment focus. What worked in Feb 2023 may not make sense right now in Nigeria. Complaining about the market is not a strategy. You need to re-invent your playbook, shift your positioning, and capture new sets of customers.
Nigerian TOP hotels and banks are declaring huge profits even in this age of economic paralysis. Examine what those hotels and banks are doing and see how you can update your playbook. The responsibility is on you, not the market, because while you can control what you do, you have no control on the broad economy.
Video: Air Peace is not loading at Ojota, Aba Park, etc; still at the airport
Comment on Feed
Comment: She literally said the “most expensive” room is 680k, and not all rooms costs 680k. That “most expensive” room is (probably) a suite or a presidential suite.
Are there people that can afford such? Of course there are, both expatriates and locals. No big deal.
My Response: You made my point. At least, they have people to fully book all their spaces. But in the same Lagos, you will have hotels priced at N15k per night, and cannot get all the rooms picked up, on the point that the economy is hard. Look at the big picture of my post and not just focus on the absolute price.
Comment 2: Spot on! The Nigerian market has indeed undergone a significant shift. With many individuals earning around $4 per day (N180,000 monthly), the traditional B2C sweet spot is no longer viable.
Repackaging and repricing products to cater to the $2 per day demographic is a smart move. This requires innovative product development, pricing strategies, and marketing approaches that acknowledge the new economic realities.
For businesses that can’t adapt to this price point, targeting higher-income earners (above N1 million monthly) could be a viable alternative. This might involve creating premium products or services that cater to their specific needs and preferences.
Ultimately, understanding and responding to the evolving needs and purchasing power of the Nigerian market is crucial for businesses to remain competitive and sustainable.
