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Ethnic-to-population ratio
Nigeria is a well-known African civilization with a land area of 923,800 square kilometers and a population of 227 million. Nigeria has attracted many entrepreneurs from all over the world with its potential development prospects and abundant natural resources, among which the fashion industry is full of potential and huge business opportunities. As a multi-ethnic country, 90 per cent of Nigeria’s population is of the Sudanese Negro (indigenous), followed by the mulatto-black Fulani, Arab Shoa, Ibibio and Ijo. They have retained their original cultural customs and traditional way of dressing. Nigeria’s multi-ethnic nature gives the apparel and fashion industry the potential for diversity and moving forward. At the same time, a large population will promote the supply of more consumable resources, and the abundant natural resources provide a high material basis for the
production and service of the industry.
Market segments
The steady growth in consumption levels and the demand of different proportions of the population have provided huge opportunities for retail operators in Nigeria to expand. Nigeria is the largest economy in Africa and once had a thriving textile industry. During the golden period of the textile industry from 1985 to 1991, the industry grew at an annual rate of 67%. In 1991, there were more than 350,000 employees in the textile industry, accounting for 25 per cent of Nigeria’s manufacturing workforce. At that time, there were about 180 textile mills in operation. However, due to unstable power supply, high financing costs and outdated production technology, all but 25 textile mills are still operating. In 2009, the Nigerian government set up a 100 billion naira textile and garment intervention fund, which was allocated to Nigerian textile companies at an interest rate of 6%, in an effort to revitalize the textile industry.
Market Opportunities
With Africa’s urban population growing and younger and the growing middle class leading to increased consumption, there is a growing demand for clothing and accessories. Niche and middle-income groups have different levels of demand for high-quality and low-cost products. In addition, the increase in stores and retailers has increased the demand for textiles and clothing. In Nigeria, in addition to Lagos, there are many hot wholesale markets, and the Igbo city of Onitsha in the east is also a huge wholesale city that is famous throughout the country and even nearby African countries. The Onitsha market is very important in the economic and commercial position of Nigeria, where there are many large wholesale markets, and the wholesale scale is far
beyond the level of Lagos.
Market Pattern Analysis
| Favorable factors | Risk factors |
| Africa’s largest economy with stable economic development | Ethnic and religious conflicts continue in the country, terrorist activities are frequent in some areas, and security risks are high. |
| It has a high degree of opening up to the outside world and enjoys preferential export tariffs to Europe and the United States; | The government is inefficient, and its ability to supervise and enforce is weak. |
| Africa’s most populous country, with large consumer market potential, abundant labor resources, and low wages; | he country’s infrastructure is poor and the supply of water and electricity is tight. |
| The investment policy is relatively relaxed, there are many incentives for manufacturing investment, and the government intends to develop the textile and garment industry; | Foreign exchange controls are strict, making it difficult to obtain local financing for the manufacturing industry. |
| The geographical advantage is obvious, and the market radiates to the entire West African region | The supporting capacity of the textile industry is weak and there is a lack of skilled skilled workers. |
Competitive advantage
Nigeria is one of the largest economies in Africa, with a large population and huge market potential. As a member of OPEC, Nigeria has nearly $40 billion in foreign exchange reserves and strong market purchasing power, providing a broad market space for the apparel industry. With the popularization of the Internet and the development of e-commerce, online sales have
become an important channel in the Nigerian clothing market. Entrepreneurs can expand sales channels and improve product coverage and market share through online and offline integration. The Nigerian government has given many incentives and favorable conditions for foreign investment in Nigeria, such as the preferential conditions provided by the African Development
and Opportunity Act, which provides policy support for the development of the garment industry. Nigeria has a unique culture and fashion needs that provide a rich source of inspiration for clothing design. Through unique design, premium quality, and innovative marketing strategies, entrepreneurs can stand out in a highly competitive market.
SWOT Analysis
Strengths
Large market size: Nigeria is one of the largest clothing markets in Africa, with a huge consumer group, especially young people who have a high demand for fashion and branded clothing.
Investment attractiveness: The Nigerian government encourages foreign enterprises to invest and provides preferential policies such as registration, land use, taxation and capital flow support.
Superior geographical location: Located in West Africa, it has a strong radiation force to neighboring countries, which is conducive to expanding the market.
Abundant raw material resources: Nigeria has abundant natural resources, such as oil, natural gas, etc., which can be used in related industries of garment production.
Sufficient human resources: Nigeria has abundant and cheap human resources, which is easy to recruit, which is an advantage for the labor-intensive garment industry.
Weaknesses
Backward technology: Nigeria’s textile technology is relatively backward, the main fabric is batik or imitation batik printing and dyeing fabrics, and the edging and trimming processes still follow the ancient low-speed weaving technology.
Insufficient production capacity: Nigeria’s cotton yarn and polyester yarn production capacity is insufficient to meet the full demand of the domestic market.
Lack of brand influence: Nigeria lacks clothing brands with international influence.
Dependence on oil: Nigeria’s economy has long been dependent on oil production and exports, with a single economic structure and limited support for the development of non-oil industries such as clothing.
Opportunities
E-commerce development: With the development of e-commerce, the online shopping market in Nigeria is growing rapidly, providing new sales channels for the apparel industry.
International Trade Agreements: Nigeria participates in several international trade agreements, such as the Cotonou Agreement and the African Growth Opportunities Agreement, which helps Nigeria’s apparel products to enter the international market.
Popularization of cashless payment: The popularization of cashless payment mode provides convenience for e-commerce and online payment, which is conducive to online sales in the clothing industry.
Threats
Economic instability: Nigeria’s economic growth is greatly affected by fluctuations in international oil prices, and economic instability may affect the purchasing power of consumers.
Fierce competition: With the entry of domestic and foreign brands, the competition in the Nigerian clothing market is becoming increasingly fierce, posing a threat to local brands.
Technology upgrading: With the progress of science and technology, traditional textile technology may be gradually eliminated, and it is necessary to constantly update technology and equipment to maintain competitiveness.
