Ibadan Business Landscape Analysis
Having interacted with over 300 Ibadan-based MSMEs (micro, small and medium enterprises) in August-September 2016, my knowledge of businesses in Ibadan is first-hand.
What is True?
Ibadan is a city with over a million (1,000,000) inhabitants. It has a huge landscape and a large market (population).
It is a center for manufacturing, and industrial giants like P&G have factories located in the heart of the city.
Life is simple in Ibadan, no traffic, relatively low crime rates, few motor accidents…
Life is cheap e.g. you can get cabs for as low as N20 in Ibadan (this is unbelievable, even in a smaller town — Abeokuta; my home city, the least cab fare costs 50% more), movies cost as low as N500, solid beans and bread goes for N120.
Of the 300 businesses I interacted with, most of them were uninspiring; they generally fell into the category of housewives who just wanted to own their own “shop”.
No customer care, no vision or ambition. Just surviving day to day. It was generally disappointing.
The market is poor, and a lot of businesses just don’t have customers or make enough sales to cover their expenses and make a profit. The customers they get are always looking to pay “Ibadan price” (i.e. extremely cheap). So it's generally hard to build a business here.
Although, there are premium customers here in Ibadan; the population density of those customers compared to a metropolis like Lagos is poor.
Some customers, wary of quality products/services; travel to Lagos to purchase what they could have obtained here in Ibadan — money unnecessarily going out of the city’s economy…
The cheap/unambitious mentality can limit a person or businesses’ achievements. In Ibadan, we survive. I have to motivate myself daily, for we have to accomplish great things.
There is money in Ibadan. Real Money.
Some businesses thrive; essential products/services. Think the food business, supermarkets, pharmacies, cinema, transport, beer parlour :) etc.
You might be wondering why I chose to stay in Ibadan, given all the cons versus the pros.
My Plan A was to live cheaply while earning just enough to grow my skills and build a product that’ll change the world. My intention was to sell products to customers for cheap. Having spent 9 months working this strategy, I found that the people here generally don’t need/value my service (website development), and its quite difficult to find those that do.
In life, one has to face reality and adapt.
So my Plan B is to keep living cheaply and acquire clients majorly via the internet (most of whom are from Lagos — inflow of money to the city’s economy :) and still build a product that’ll change the world.
Thus far, my new plan is working…
What do we Need?
This is not to say that Ibadan is a bad market, it’s just not a great market for a lot of products/services.
So it’s important to consider very carefully what you want to sell in Ibadan and how you want to sell it.
You have to understand/accept that the market places an extra emphasis on cheapness of products, so selling products at a cheap price but to a large number of people works e.g. selling a plate of food for N150 but selling 1000 plates a day and 30,000 plates a month, this is equivalent to a monthly revenue of 4.5million naira (30,000 * 150), at a profit margin of 30%; you get a profit of 1.5 million naira.
With Ibadan, it's all in the numbers. Focus on the volume of sales.
How many people can you sell to? How cheap is it? As with all markets, the cheaper the better.
Of course you could also sell high priced goods to a limited number of people. Bar a few exceptions, I’d advise against this strategy for Ibadan.
As mentioned earlier, there is a huge shortage of ambitious businesses that care about their customers and how far their business goes.
Businesses that want to build a strong brand, earning customer loyalty and conquer Nigeria (I’m taking it too far :)
There’s an opportunity here for well crafted brands to take over the local market.
We also need the intelligent people; those brilliant minds who have schooled here or grown up here; to live in this city and invest in making it a better place.
What to Do about it?
In recent years, shopping malls have taken Ibadan by storm, and the city is slowly evolving into a metropolis. It is still a long way though.
We need modern restaurants, cafés, bars, lounges, motels, housing, petrol stations, car washes, supermarkets, pharmacies, cooking gas stations etc. By modern I mean high quality businesses carefully crafted to serve their customers.
Starting new businesses to serve basic needs is encouraged. (look at the examples I gave above).
Great products/services is key. Given the low standards we experience, word-of-mouth is a huge source of obtaining new clients. Having great customer service also goes a long way. Whatever you do, give it your best, and before long you’ll be the best at it (local sampion).
I can not overemphasize how important word-of-mouth is in this city, give your work the best efforts. Stand out.
Patience is required, it’ll take months, but you’ll succeed.
Billboards, Radio stations, Facebook & Instagram are the major marketing platforms by which paying customers hear about products.
Maximize them.
You could also go my path, live in Ibadan and work remotely or earn your income from outside the city. It’s a great place to be if you earn a good living. You can do so many things at a relatively cheap price.
Ibadan is a city with a rich cultural heritage, and with its close proximity to Lagos and inflow of new investments into the city, Ibadan is eventually going to evolve into a metropolis. The burning question is not: Who will take us there? But when will it happen. It is inevitable.
These are just my thoughts, which reflect my experience and the data I have been exposed too. I am in no way an expert on Ibadan, neither have I carried out thorough research to support my conclusions.
Forgive me if you disagree with any of my views, please enlighten me and improve my mind’s model of Ibadan by leaving a comment.
