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FMCG distribution in Nigeria
By Joseph Okoghenun
Disruption has transformed from being a business cliché to a fearful reality, especially if businesses intend to be relevant in the coming years.
Disruptions have changed the banking sector, the telecom sector and recently, the e-commerce sector.
A little over 20 years ago, Nigerians spent an average of one hour in a bank branch to withdraw as little as N2,000. Today, you could stay away from the bank and carry out transactions fully with your phone.
In 1998, it took 34 days to acquire a NITEL (Nigeria Telecoms) landline phone at the cost of N120,000, an equivalent of $5,481 at the exchange rate of N21.89 per dollar. Now, 21 years down the lane, a smart landline phone costs less than N10,000. Furthermore, this can be set up within 10 minutes!
In 2015, an obscure Yudala in the thick of a recession changed the narrative in the Nigerian e-commerce space. Yudala became the first composite e-commerce (offline & online) company shaking the foundations of the big two.
In the Fast Moving Consumer Group (FMCG) distribution space, TDiLife, an organization headquartered in Lagos came with a mission to progressively redefine consumer and lifestyle products distribution in Nigeria and Africa. The company employed technology in creating an efficient supply chain that delivers value to customers and consumers without stories. Within two years of commencement, the company has redefined FMCG distribution.
This was the disruption required to transform FMCG distribution and create a distribution company for the future.
Today, large Original Product Manufacturers (OPMs) can rely on distribution partners with capacity in the following:
- Logistics: trucks, vans and partnership with strong delivery companies
- Technology: ERP, contact center, social media
- Skilled staff in the areas of audit, accounts, inventory, management and conducive and digitalized warehouse.
- Affiliation with modern online banking facilities to minimize exposure to fraud and create a secure financial management platform.
- Consultancy in the area of route-to-market.
- Efficient inventory management strategy FIFO (First in first out) and SISO (Sale in sale out)
- Integrated inventory control and management strategies in a largely transactional ecosystem.
The challenge today still remains the inability of OPMs to appreciate these investments and compensate for these investments in the FMCG distribution landscape.
The future is here already, regardless…
To be continued…
