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TradeDepot Highlights Top Trends that will Shape Nigeria’s Retail Sector in 2021
TradeDepot, the B2B eCommerce platform for consumer goods in Africa, has today released new insights from its market data that highlights the trends that will shape Nigeria’s retail sector in 2021.
According to TradeDepot, the impact of the pandemic, rising inflation, border closures and other issues drove significant changes in behaviour for retailers, distributors and manufacturers in 2020.
As the sector settles into the new year, TradeDepot predicts that some of the main trends that shaped 2020 – particularly smaller packaging for consumer goods and increased spending on food and essential goods due to dwindling disposable income and people spending more time at home – will continue to influence behaviour across the market.
The retail sector is the third largest contributor to Nigeria’s Gross Domestic Product (GDP) and more than 90 percent of the sector is made up of informal retailers.
TradeDepot has built a network of more than 50,000 micro retailers, working with global distributors and manufacturers like Nestlé, Unilever, GB Foods and Danone to make household supplies such as milk, soap, detergent and other essentials more accessible and affordable. The top insights from TradeDepot’s data include:
Key trends from 2020
- Across the retail sector, the pandemic led to an increase in store owners exploring alternative channels of reaching, acquiring and servicing customers – especially online and social media. Demand for TradeDepot’s services increased by 500%, with a 300% increase in transaction value and volume on the back of the pandemic.
- Consumer buying patterns shifted slightly towards more food items, with growth in purchase of food and essentials as opposed to other categories. TradeDepot’s data revealed a 10% increase in the overall contribution of food items to the distribution volumes, compared with 2019.
- In the drinks category, the lockdown impacted the ability of manufacturers and distributors to sell into bars, restaurants and clubs, which usually account for up to 60% of their revenue. As a result, many shifted their attention to Mom and Pop, convenience stores etc to cushion the impact
- In the detergent category, price increases driven by inflation led many manufacturers to either introduce or expand production capacity for smaller packs (25g, 90g, 190g, etc) to drive more volume in the consumer segment of the market, which accounts for 65% of the market. The pandemic also saw the introduction of more hygiene-related products to help curtail the spread of the virus
What do these trends mean for the Nigerian retail sector in 2021
- We foresee manufacturers adapting to rising inflation and dwindling disposable income by extending the trend of smaller packs to other product categories
- Manufacturers will explore more alternative route-to-market channels with capabilities to build retail networks and offer logistics-as-a-service to mitigate the risks that come with serving new customer bases
- We expect an increase in the number of challenger value brands and new market entrants offering lower priced products in key categories as consumers get increasingly price conscious and more eager to experiment with new, lower-priced products.
- We also anticipate a rise in products and services designed to help consolidate and improve the industry. There could be more competition higher up in the value chain with more platforms designed to provide auxiliary services like goods packaging and processing etc.
- With the pandemic still ongoing, we envisage that people will continue to take a cautious approach to mingling in crowds and will spend more time at home than in previous years, As a result, spending on food and essential goods is likely to increase
Challenges and opportunities for 2021
- There are challenges with data aggregation because it is a relatively new discipline in this space but so there’s an opportunity for companies with the right capabilities to capture this and utilise it to cater to the audience. Structured access to short term inventory financing at minimal interest rates will also help stimulate growth
- There are also challenges with infrastructure and logistics, which makes it difficult for store owners to meet the demands of the customers and grow their businesses.
- Access to working capital is still the biggest challenge most retailers face in trying to grow their business. There has been some progress with financial services for consumers in recent years and there is potential for many of the learnings to be adapted for retailers
According to Onyekachi Izukanne, CEO and Co-Founder of TradeDepot, “the retail sector is one of the strongest pillars of the Nigerian economy but the absence of data and verifiable insight often makes it difficult to assess the opportunities and challenges that abound in the space.
The sector is also hampered by infrastructure and logistics issues that undermine the efforts of the industrious business owners. With some more support from government, public institutions and private sector players, there is the potential to transform the Nigerian retail market and achieve a quick win for boosting the nation’s GDP”.
British High Commission in Nigeria has reiterated the strong, long-standing relationship between the United Kingdom and Nigeria following the release of the UK Immigration White Paper earlier today.
A spokesperson for the High Commission stated that the UK remains a top destination for Nigerians seeking opportunities to work, study, visit, and settle, acknowledging the valuable contributions Nigerians make to the UK economy and society.
The White Paper outlines reforms to legal migration, aimed at restoring order, control, and fairness to the system while promoting economic growth.
The spokesperson assured that changes would be gradual, with further engagement between the UK and Nigerian government officials once implementation details are finalized.
“The UK has a proud tradition as an outward-looking nation, investing and trading abroad, and welcoming the creativity, ideas, and diversity of those who come to contribute here,” the spokesperson said.
The UK government has pledged to work closely with Nigerian authorities to ensure a smooth transition as the new immigration policies take effect
Nigerian Electricity Regulatory Commission (NERC) has directed nine electricity Distribution Companies (DisCos) to compensate Band A customers residing in 557 streets across their franchise areas for failing to meet the minimum power supply requirement under the new electricity tariff regime.
According to NERC, the affected DisCos must implement compensation across 152 electricity feeders due to poor supply in April.
The compensation will be provided through electricity credit or improved power supply, as outlined in the April 2025 Multi-Year Tariff Order.
The directive affects the following DisCos:
Abuja Electricity Distribution Company (AEDC)
Eko Electricity Distribution Company (EKEDC)
Port Harcourt Electricity Distribution Company (PHED)
Kano Electricity Distribution Company (KEDCO)
Kaduna Electricity Distribution Company (KAEDCO)
Ikeja Electric (IE)
Ibadan Electricity Distribution Company (IBEDC)
Benin Electricity Distribution Company (BEDC)
Enugu Electricity Distribution Company (EEDC)
The development follows a tariff hike of over 300% for Band A customers in 2024, which mandated a minimum daily power supply of 20 hours. Despite the increase, many consumers have continued to report poor service delivery, leading to the latest compensation directive.
NERC stated that affected DisCos must upgrade power supply in designated areas or provide electricity credits to customers who experienced service failures.
Socio-Economic Rights and Accountability Project has called on the Central Bank of Nigeria to immediately disclose whether it has commenced the direct disbursement of allocations to the 774 local government areas in Nigeria, following the Supreme Court’s landmark judgment nullifying state governors’ control over LGA funds.
In a letter dated 10 May 2025 obtained by our correspondent, addressed to the CBN Governor, Mr Olayemi Cardoso, and signed by SERAP’s Deputy Director, Kolawole Oluwadare, the group also demanded that the bank “widely publish the amounts, if any, so far sent directly to each of the local governments” and provide a detailed explanation of any payments already made—particularly to LGAs in Rivers State.
The group stated: “We are writing to request you to use your good offices and leadership position to immediately disclose whether the CBN has commenced the direct disbursement of allocations to the 774 local government councils in Nigeria from the Federation Accounts with the CBN, and to widely publish the amounts, if any, so far sent to each of the local governments.”
This request follows a Supreme Court judgment declaring the practice by governors and the FCT Minister of retaining and disbursing LGA allocations unconstitutional and unlawful.
The court ruled that no governor or agency has the authority to interfere with allocations meant for LGAs from the Federation Account.
Citing this judgment, SERAP argued: “Local government councils are entitled to a direct payment from the Federation Account of the amount standing to their credit in the said Federation Account. States should not be collecting, receiving, spending or tampering with the local government council funds from the Federation Account meant for the benefit of the councils.”
The advocacy group expressed concern that despite the ruling, many state governors have continued to “starve local governments of funds and put them in peril,” thereby undermining their autonomy and capacity to function as the third tier of government.
In the letter, the group warned that if the CBN fails to act within seven days, it would take legal action.
“If we have not heard from you by then, the Incorporated Trustees of SERAP shall take all appropriate legal actions to compel you and the CBN to comply with our request in the public interest,” the letter stated.
SERAP referenced a past revelation by former President Muhammadu Buhari, who in December 2022 described how governors allegedly short-changed LGA chairmen.
“If the money from the Federation Account to the state is about N100 million, N50 million will be sent to the chairman, but he will sign that he received N100 million. The chairman will pocket the balance and share it with whoever he wants to share it with,” Buhari had said.
The organisation argued that the CBN has a constitutional and statutory obligation to protect the financial interests of all tiers of government.
“The CBN ought to act in the public interest to protect the allocations in the Federation Account and the public funds disbursed from that Account directly to each of the constitutionally recognised three tiers of government,” it said.
Highlighting the March 2025 revenue distribution by the Federation Account Allocation Committee, SERAP noted that a total of N1.578 trillion was shared among the three tiers of government. It queried whether the LGAs had received their fair share directly, as mandated by the court ruling.
“Ensuring that all restrictions against direct disbursement of allocations from the Federation Account to the 774 councils are lifted will comply with the orders by the Supreme Court and stop states and the FCT from tampering with the allocations ahead of the 2027 general elections,” SERAP warned.
The group further argued that Nigerians have a legal and moral right to know how their money is being managed, referencing several legal frameworks, including the Nigerian Constitution, the Freedom of Information Act, the African Charter on Human and Peoples’ Rights, and the International Covenant on Civil and Political Rights.
“The public interest in publishing the information sought outweighs any considerations to withhold the information. Nigerians are entitled to the right to receive information without any interference or distortion, and the enjoyment of this right should be based on the principle of maximum disclosure,” SERAP stated.
The group also reminded the CBN that “the Freedom of Information Act is applicable and applies to public records in the Federation, including those kept by the CBN.”
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