Why companies like Shoprite are succeeding in Nigeria

Posted by Chidinma on Friday March 20, 2015 at 16:55:45:

It is not uncommon to see multi national companies like Shoprites The Game, MTN, Chevron and many others operating in Nigeria; most of these companies have been in operation for over a decade in Nigeria, and for them to still be around, it means that they are benefiting from their stay in Nigeria; some of the reasons why these multi national companies are succeeding in Nigerian are.

Some reasons:
1. Nigeria is a Viable Market For Them: with a population of over 180 million people, Nigeria is a very viable market for these Companies; if their products are patronized by just 1% of the total populations, they will still make profits, that is number one reason why they are succeeding in Nigeria.

2. Nigerians are willing to spend on Luxury: In one of the surveys made sometime last year of countries that spend more on luxury, Nigeria was listed among the top 5; it is one thing you have the market, but if the people are not willing spenders, then it is as good as not having any population. These companies know that Nigerians are real spenders and they will continue to spend on luxury products that will help them enjoy their lives.

3. Lower Tax Rates: Another reason for the success of multi national companies in Nigeria is because of the low tax rate in Nigeria; when compared to taxes paid in other countries; they pay next to nothing here in Nigeria; that means they get to keep a huge chunk of their profits that would have been used for tax payment.

4. Higher capital base: South African companies like Shoprite tend to have a bigger capital base that most retail companies in Nigeria and this allows them to rent or buy large mall spaces, employ a high number of staff, import products in bulk and run operations more efficiently

5. Good Business experience: Shoprite has been in the business of offering shopping services for a long time an they know what it takes to be successful at it and can be patient until the business becomes successful even if had previous years of failure.

6. Retail prices are reasonable: Compared to other local retail stores in Nigeria, prices at Shoprite tend to be actually good and they also offer discount sales at times.

7. Good quality products: Another reason why Nigerians like to buy things at Shoprite is because they tend to sell items that are mostly of high quality and won't mind the cost. Most Nigerians don't like getting cheated at other retail stores where sub-standard or fake items may be sold as original. Shoprite has build their name on quality.