Tess Aromesule, one of Nigeria’s leading certified business, leadership coach and trainer with over 18 years’ professional experience from several multinational companies. Her experience spans across account & brand management, sales, marketing communication, supply chain & distribution. She has helped launch some brands in Nigeria as well as the opportunity to grow global brands across sub-Saharan Africa, Europe & America.
She is passionate about changing the narrative by helping companies, particularly FMCG (Fast Moving Consumer Goods) enter new markets.
In this interview with Nosike Moses, Saturday Vanguard Business, she reveals factors that distort supply chain of organisations, the way forward and what business owners need at this time of border closure and Covid-19 pandemic destroying world economies. Excerpts:
Stories by Moses Nosike
How did you get into the FMCG Industry?
My journey started in July 2003, when I joined Tetra Pak (the world leader in food processing and packaging), a multinational Swedish company as a sales and marketing executive. It was a new world for me considering my prior experience before that in supply chain and international trade.
Is the market becoming more complex with the border closure and the present global pandemic?
Undoubtedly, the Covid-19 pandemic has brought a lot of unprecedented challenges to businesses globally, the consequences have started playing out as demand for several goods and services have plummeted. Since the issues arising from the pandemic were not forecasted, it has met several manufacturers struggling to meet demand on one side and overwhelmed on the other hand.
On a good day, this would have been a good problem if the supply chain were not affected but everything along the value chain is affected, hence the complexities.
In terms of the border closure, our high dependence on imports from China further compounds the issue of meeting demands especially at times like these. With the border closure, consumers and indeed the world at large is reviewing their lifestyle to meet the current realities. In order for brands to remain relevant and profitable under the current dispensation, they must look for creatives and innovative way to respond to the issue at hand without necessarily passing cost to consumers.
In your experience, what are the challenges business owners encounter that cripple sales?
Poor segmentation of their portfolio which is most times driven by improper research and understanding of the social-economic stratification. A lot of businesses get carried away by the sheer potential in the numbers (population).
Pricing is another key factor. The FMCG business segment is driven by low margins and high turnover. The resultant price war is not necessary if businesses learn to segment, position and define their ideal consumers and communicate their value proposition in a very clear and succinct manner. People buy from companies they know, like and trust.
Distribution model, trade margins and incentives; businesses cannot afford to underplay the role of distribution or the distributors. Distributors are in business to make profit too, so loyalty is first the value or profit that a brand can give before the brand itself.
In addition, consumers have formed new habits with the global restriction on movement. Consumers now want their orders in their time, in their space and at their pace.
The recent performance records of major multinational concerns operating in Nigeria’s business environment, especially in the FMCG sector, is said to be low, what do you think is the cause and what solutions considering the current economy?
With the border closure before the advent of the novel Covid -19 and the physical consequential restrictions currently imposed have both to a large extent distorted the supply chain for most multinationals. The aforementioned and our much dependence on import of raw materials and the devaluation of the naira has left most multinationals vulnerable. According to the National Bureau of Statistic (NBS), Asia and Europe constituted 86% of Nigerian imports in Q4 of 2019. Cost of funds and the devaluation of the naira with the dependence on imported raw material also constitute a big factor.
These long lead time coupled with the decision-making process of most of the multinationals are also contributing factors to the nosedived numbers we see. Considering the current economic landscape and recent developments, multinational companies especially FMCG products would have to begin to pay closer attention to partnership with local suppliers with a long term perspective and work with their suppliers to design innovative supply and distribution models, create channels that ensure consistent availability of their products and services to their customers. Affordability has become top of mind because several other factors are competing for the consumers’ share of pocket. The winner would be the brand that can consistently communicate and deliver value in return to the consumer needs at an affordable price. Survival and feeding are top of the consumer chain.
With consumer demand and ever-changing innovative technology, how can a business owner adapt to change and expand to new markets?
One of the factors for market leadership is the ability to listen and respond quickly to what customers or consumers are saying per time about your brand or the perceived value that you are offering as a brand.
For example, with the pandemic at hand, a lot of consumers’ lifestyle has changed, their demands and idiosyncrasies have changed, it would, therefore, be foolhardy to continue to do business as usual. Strategies will have to be tweaked; route to market, communication and integration of e-commerce is inevitable. Attention is the new currency. It has become one of the most critical resources in this new world. Every brand owner or service provider is seeking the attention of consumers and consumers will only buy from brands that catch their attention. Whatever offers you have; consumers must feel it enhances their status, in other words, improve customer experience. For new markets, seek strategic alignment with similar brands.
Finally, is there a need for more technical support in Nigeria for FMCG Businesses?
It’s a new world since the novel Covid-19 pandemic, E-commerce integration has become a necessity for any FMCG business that wants to remain relevant in this new world order. The game-changer would be the one who is able to respond quickly to the issues at hand with the maximization of e-commerce and logistics. Financial tech service providers within the retail sector although available can be made more affordable within the retails space to ensure lower entry points to SMEs. With all these, it is obvious that there is a need for technical support and education, especially within the essential trade sector.
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