Akubuiro: Despite Rising Inflation, Retail Market Caters for Growing Population                 

With continuous rise in inflation, prices of goods and services are hitting the roof as the value chain is bearing the brunt. Managing Director for West Africa, TradeDepot Inc., a B2B e-commerce platform, Chidi Akubuiro, speaks with Kunle Aderinokun on some causative factors of the unabating inflation, its impact on the retail marketing space and role of his firm in helping consumers navigate their ways out of the predicament         

What’s your assessment of the Nigerian economy?

For our business, when you look at the retail chain, the inflation, at the moment, is the major topic across the retail business because we have prices rising. Everyone is aware of the crisis between Ukraine and Russia, which is affecting importation of products used for production. Others are the prices of diesel and petrol, which have gone up. The food prices are also up. The manufacturers, because of the increase in things aforementioned, also need to find a way to maintain the business profitably or survive the business for this period. Prices are going up across different products, categories and obviously, that affects the consumers who have to pay more for almost every single thing.

In specific terms, how does the Ukraine and Russia war affect supply business and retail marketing space in Nigeria?

Using a product as an example, I will consider flour. Bread is a big market in Nigeria and Africa. We have had inflation on bread now almost 35 per cent. Bread that sells for N300 now sells for about N700. If you look at the main reason, you will discover that  it is the source ingredient, which is flour. Half of the flour we use is imported and the wheat is imported into the country. And some of the source materials are also brought in from the Russia and Ukraine axes. Obviously, with this war now, the ports are closed over there. It affects the supply chain and also affects the production here. The companies who make use of these raw materials will have to wait, which affects their demands. Then, flour sells for N12, 000 and now you buy for N29, 000. So flour is a very good example. 

The NBS report for July put inflation at 19.64 per cent and we understand the manufacturers are bearing a major brunt of the impact. As an e-commerce company, how does this affect your operation?

Because we all operate within the country, there is nobody or organisation that is not being affected by it. An example is a restaurant that uses a generator for power supply and at the same time, the generator uses diesel and each of the products that they will use to make their meals are gotten from the market and from suppliers. At each point in time, the prices of things that have increased will affect them.  Despite all these, what we are trying to do at TradeDepot is to make things easier and also help the retailers to survive, no matter what. We guarantee that the retailers get the products at reasonable prices regardless of the increase from the company. We offer financing to the retailers. We provide them a ‘Buy-Now Pay-Later’ scheme where they are able to get products from us and sell over a given period of time.  Even though the prices are going up, the fact that we are making the products available to them saves them from closing their shops and heading to the market to buy those products which will cost them transportation fees and may even close their shop for the whole day. We save them from stress and cost points by delivering to them directly.

As an expert in marketing, considering the level of inflation, does it directly affect your turnover? In fact, what is the correlation between the inflation and your turnover?

One of the blessings to this country is that we have a growing population. At this point that the population increases, then the retail space caters for the growing population. With inflation, the occasion still doesn’t change. As an individual, I won’t say because the prices of toothpaste and bathing soap have shot up, I won’t buy and use them. What may happen is that I’ll shift from the A-list brands to the lesser ones that will still satisfy my needs. Yes, we will see a lot of shifts to most likely substitutes, but transactions will still happen. Another thing that will also happen is a shift in the volume of transactions. People will focus more on top-up shopping to stock-up. Yet, the transactions are still coming even though they may not be as fast as we have perceived in the previous years, yet we are still coming up and we are also seeing a shift in terms of moving to substitutes. Truly, the effect is there, but because of the growing retail space, it is not as visible as it sounds or looks like right now.

In other words, you mean business is still good for you?

When I mean business is still good, I simply mean that we are still growing. We are still experiencing growth. And on the other end is why we introduced the buy-now-pay-later support for our retail space. We know things are costly outside, but we assist them so they can cater for their consumers.

As a marketing expert, what do you propose as a way around the rising inflation?

I’m not in the government. I would have suggested one way out. The inflation is global and not only in Nigeria and I want to believe the government is trying their best. We hope that the war between Ukraine and Russia ceases. Picking from the retail spaces which I control, I will say we will continue to be committed to growth to ensure that retailers stay in business because they also want to earn a living. So providing financing is very key. We have been trying to ensure they have access to manufacturers’ products, which is the chain we have built to have the products delivered to them. And we believe the process will have an impact on the economy.

What is TradeDepot’s niche market?

TradeDepot is an e-commerce distribution company that has a bit of financing embedded within our business. In simple terms, we are a pipeline between the manufacturer and the retailer. We are bridging the gap. When you look at the recent retail chain, you will discover that between the manufacturer and the retailer you have distributors and the wholesalers. While the wholesalers bothers about getting the products from the manufacturer, what we have done is to put ourselves in between that gap to become the link for both parties.