Pi Attitude Zone: Flexibility

Nigerian Retail Different From South Africa’s

As Pi often reminds readers of this blog, differences in consumer perception can mark a dividing line between spectacular commercial success and abject failure.  The retail trade in Africa has just given us another example of how to go wrong by assuming that “people are the same everywhere”.

Woolworths stores are a household word in South Africa, where the store chain maintains an easy market dominance.  International-minded marketers there assumed that they could duplicate their success by expanding into Nigeria, the other giant consumer market of the African continent.

But it was not to be.  At the end of 2013, Woolworths pulled the plug on its three Nigerian stores just eighteen months after the chain opened its doors there.

What went so quickly and spectacularly wrong?  The rueful press release blamed failure on excessive store rental costs and problematic supply chains, among other mundane reasons.  Such problems could and should have been anticipated before Woolworths of South Africa rashly strayed into foreign territory.

A more realistic reason is probably that the chain had an unrealistic expectation of quickly establishing household-name status to match its dominant awareness figures in the home country.  In reality, too many Nigerians had no familiarity with South African cultural norms, and had never heard of Woolworths.  Those who did recognize the name tended to be wealthy Nigerians accustomed to frequent travel in Europe, especially London.  They would recognize Woolworths as the name of a down-market British retailer, which went bust and closed its doors several years ago – not good associations if you are trying to sell people a “refined and exclusive shopping experience”.

Pi says: do your homework before committing your millions to foreign adventures.

Zone: Flexibility Country: Middle East / Africa Product – Retail