Players in the events market met recently and deliberated extensively on how to grow the industry. Jonathan Eze writes that a united platform like the one being conceived would result to optimal returns for investors and boost the economy
An industry that contributes conservatively over N100billion to the Gross Domestic Product (GDP) of Nigeria annually and potentially has about N1trillion in turnover clearly needs to regulate itself. As the desire for glamorous and colourful events increase, one can only imagine how exponential the contribution of this sub-sector to the Nigerian economy would be.
This prompted the convener of Events Market Nigeria (EMN), Temitope Amodu, to bring all the players together such as wedding vendors, stakeholders, entrepreneurs, make-up artistes, DJs and event market enthusiasts among others who gathered for a day of networking, mentoring and discussions on pertinent issues about Nigeriaâ€™s ever growing event industry.
According to him, the motto of EMN, â€˜People Togetherâ€™, is what defines the group which could be seen from its logo of a group of people holding hands. The 10th edition of the Event Market Nigeria Meet and Greet was the largest free gathering of participants in the event industry in recent times, an event every key player in the event business attended.
The mission of Event Market Nigeria Meet and Greet was to bring about collaboration, cooperation and coexistence in the midst of â€œHealthy Competitionâ€. The event recorded over 700 attendees who were keen at learning, networking and poised for an early stages of a national policy on event industry practice in the federation.
Speaking with THISDAY on the sideline of the event, Amodu said his vision is to contribute to building a greater and better Nigeria and achieve a unified national event body by 2020. He said, â€œThe goal is to create an ecosystem that allows growth and development to take place, one that identifies, creates and drives excellence within the youths and veterans of the event industry.
â€œEvent Industry Nigeriaâ€™s core focus is in educating and developing, solidarity and in the building, shaping and re-orientating of young and veteran event-entrepreneurs who make the decision to pursue this path within the event industry Nigeria value chain.â€
Speaking at the event were life coaches, award winning event producers, Presidents of Registered Event Associations and Makeup Artist Guilds in Nigeria.
The impressive cast of speakers and advisors were able to feel the pulse of the industry and were very delighted to lend a voice in the shaping of the event industryâ€™s Nigeria best practices.
Among the speakers were Deola Okesola, Mr. Tosan Jemide, Bisola Trendy, Biodun Oniyitan, Mayowa Oloyede, Helen Ibe, Victoria Folarin among others, while the participants were treated to delicacies by Ikyuma Obaigbena @urbancuisine, one of the sponsors.
The Chairman of DJ Association of Nigeria – Mr. Jimmy Jatt Amu, was also on ground to share industry related insights and emphasised the importance of collaboration as the new completion within the event cycle.
One of the speakers at the event, Micheal Orimobi, said a country that has a population for almost 200 million people and a reputation for an ostentatious culture, it is a no-brainer that the events industry is a rough diamond. It is also a no-brainer that investing in that industry may be more profitable than any get-rich-quick scheme.
He said, â€œThe richest people are those that can satisfy the daily needs of an average individual (food, shelter, clothing and maybe recently technology).â€
He noted that since people love events and have fun, they look for any excuse to throw a party (it is the only thing that can make people sane in a recession or in a volatile emerging market). Thus, it is a no-brainer to set up a business or be involved in any trade or activity that cashes in on this idiosyncrasy.
He added that in most parts of the world, the hospitality industry has been a source of optimal returns for investors. He said, “In Nigeria, although the industry had been overlooked in favour of more attractive industries like oil and gas, this has begun to change. In the spirit of diversification of the economy, the Nigerian hospitality industry looks set to be one of the fastest-growing in Africa.â€
The events industry happens to be one of such dynamic and fast-growing sub-sectors within the hospitality value chain. Professor Okoli Fidelis Chukwuma highlighted this in an international peer review journal in 2014, when he affirmed that events are the new trend in the hospitality industry. These events have taken the shape of flamboyant weddings, concerts, corporate events and even small private gatherings.
He reeled out statistics to prove that the industry is one that is growing exponentially, The events industry has grown at an average pace of 6.2 per cent each year globally since 2003. He said, “The Nigerian events industry is estimated to be among the most extravagant in the world. According to TNS Global, 17 million dollars was spent on parties in Lagos over a five months period in 2013. Statistics have it that an average Nigerian company or middle-class family spends over 15,000 dollars per event.
â€œLagos State alone reportedly hosted over 20,000 events monthly in 2015 with expected earnings from these amounting to over 3,000,000,000 dollars annually. Hardly does any week go by in Lagos State alone without well over 2,000 events happening including in remote locations. Forbes reports that Nigerian elites spend an average of 2 million dollars on their dream weddings.”
Some facts about the industry
The recent growth in the events industry has contributed to the spontaneous growth in many business verticals e.g. event planning, venue, photography, food and many more services along this massive value chain.
One part of the events industry that has boomed steadily is events management/planning. Events Management is defined as the application of project management to the creation and development of a ceremony. It involves studying the brand, identifying the target audience, devising the event concept, planning the logistics and coordinating the technical aspects before actually launching the event.
Basically, there are two types of events, namely; corporate and social events. The social events are the most common – wedding receptions, funerals, concerts, product launches, naming ceremonies, birthdays, concerts, fashion shows, house warming etc.
By far, weddings are the most common in the events industry in Africa, especially Nigeria. According to RicheeTech, about 30 per cent of wedding budgets are spent on the reception or wedding venue. Depending on the location, the average wedding budget in many cities in Africa could be between 4,500 to 40,000 dollars. In Lagos for example, depending on its location, size and features, wedding venues can go for anything from 1,000 to 20,000 dollars per day.
Companies have in recent times, begun using events as a key marketing and communication tool – product launches, press conferences, end-of-the year parties etc. Companies now create promotional events to help communicate with both existing and potential clients.
The poser remains that with so much potential in the industry, so much demand for product/services, with so much income/liquidity in the sector, why hasnâ€™t the industry truly attained its rightful place as â€œToo Big To Failâ€?
Challenges facing the Event Industry
It is not a very organised industry; particularly because there is no specific legislation regulating this sector of the economy. Because there are no specific laws, rules and regulations governing this sector, it is like black market â€“ you might be lucky to cash in or you might lose out.
A common complaint from customers/clients of the industry is the issue of liability. Who bears the risk when things go missing or are destroyed at an event? Who bears the liability when events do not go as planned as a result of the negligence of vendors? Who compensates a customer/client in the case of a natural disaster or terrorist attack in the course of an event?
Furthermore, when disputes arise between a professional in the events industry and a client, there are no regulations on the applicable dispute resolution mechanisms. How do the players in this industry seek redress for defaults or resolve their problems? Remember that sometimes, the quantum of funds involved in these transactions do not make the regular court system a viable alternative.
Specific legislations, rules and regulations to be enacted to guide this industry are urgently needed. The amount of liquidity in the events industry is too massive for it to be left unregulated.
Another challenge as identified by Orimobi is that the industry is too fragmented. According to him, there are too many small players. One of the byproducts of having too many small players in any industry is that it breeds cutting corners and sub-standard service. Players in the industry would begin to look for cheap ways to getting things done rather than adhering to ethical and professional standards of the industry. You need to consolidate.
He advised: â€œYou need to merge your businesses and develop big and robust organisations. Imagine a full service events business that is a one-stop shop for clients â€“ an events business that has different departments that caters for all areas in the value chain of the events industry without any need to outsource.
â€œFrom day one, that business becomes the poster boy for how events businesses should be run. This increases clientele, income, market share, brand equity etc. Why would you want to own 100 per cent of a N5m per annum business (turnover) when you can own five per cent of a N10bn per annum business (turnover). Your industry needs to begin to create businesses that can transcend generations. I look forward to seeing the first events business to be listed on the Nigerian Stock Exchange or the first events business that will access the capital markets for funding. There is an opportunity for the emergence of a real market leader in this industry.
â€œMerge and consolidate your businesses! Grow your business to the point whereby clients come to you not because of ‘nepotism’ or â€˜luck’ or ‘referral’ but because you are the biggest brand in the industry and they have no choice but to come to you (biggest brand in terms of income, branches, one-stop shop, employees etc). There is power in size! Think big but smartly! For the already big players in the industry, start acquiring the smaller players â€“ take them out – reduce your competition; for the smaller players, join a bigger platform in exchange for equity (don’t be fooled by that fallacy that you are only happy or fulfilled when you run your own business).
“As mentioned earlier, the industry has a liquidity of about N1trn. Imagine, growing your business to capture just one per cent of that liquidity (i.e. N10bn). This can be achieved with proper restructuring of your various businesses â€“ you just need the right advice.
â€œProtect your business via written contracts, create a proper corporate structure for your business, adhere to the simple principles of corporate governance (e.g. have a board of directors or advisors etc), retain a good audit and tax firm to examine your books annually and make your business tax efficient, retain a legal partner to mitigate your legal risks. Run a business and not a hobby!â€