Group Managing Director and Chief Executive Officer of United Bank for Africa (UBA) Plc, Phillips Oduoza, has said that Nigeria ’s retail sector holds huge potential for growth.
Oduoza said this in a keynote address at the 2014 ‘Retail Leaders Conference held at the Sheraton Hotel, Lagos
The UBA boss, represented by the bank’s Director of Consumer Banking, Ilesanmi Owoeye, listed several factors driving the growth of Nigeria ’s retail industry.
These factors include; the ongoing reforms in key sectors of the Nigerian economy aimed at bridging infrastructural gap, reducing unemployment levels, improving literacy level and improving access to funding by SMEs, which will significantly impact the level of disposable income and effective demand in the near future, affording the sector unprecedented growth opportunity.
He also identified increasing technology penetration in Nigeria as another factor driving the growth of the retail sector as this is giving retailers access to valuable market information about purchasing trends as well as segment preferences, making it increasingly easy to adapt sales and marketing approaches and improve consumer experiences. Another factor is the increasing penetration of the informal sector by retailers.
“Without doubt, the continuous rise in mobile technology will be pivotal to the next stage of the retail market development, fuelling its integration with the global retail trade economy and significantly increasing its ease of doing business. This prospect is already becoming evident in the rising trend of online retailers that are increasingly gaining traction and matching the emerging sophistication of Nigerian consumers’ changing demand and payment patterns.” Oduoza said.
He called on banks to adopt on more collaborative financing mechanisms to enable retailers develop their capacities, expand operations and adopt innovative practice production standards to reduce operating cost and optimize value.
He said innovative partnerships among retail financial service providers will increase focus on the funding of retail-based infrastructure development and product distribution projects.
His words: “In an environment of collaborative partnerships, banks will partner retailers in promoting the acceptance and mobility of innovative payment platforms. For example, cheaper mobile-based point-of-sales will replace the expensive terminals currently in use, and we will see mobile-to-mobile funds transfer added to the bouquet of payment platforms,” he stated.
“UBA recognizes the growth potential of the Nigerian economy and the retail sector in particular, so we have and will continue to intensify our support for the sector through provision of innovative payment, cash management solutions and appropriate funding options along the entire value chain.”
He disclosed that the banking sector is collaborating with the Central Bank of Nigeria to deploy an industry-wide biometric system, which will significantly improve consumers’ access to both secured and unsecured financing, thereby increasing the retail market potential.