Malls May Be Struggling In The U.S., But In Nigeria They’re Just Taking Off
With its rising middle class, Africa’s most populous country is embracing the places and culture that are sagging in America — mall culture, that is — NewYorkTimes reports.
Many enclosed malls anchored by big box stores may be struggling in the U.S., according to the report.
Emerging malls — and mall culture — in Nigeria reflect broad trends in Africa, including a growing middle class with money to spend. Malls are changing the economic climate in cities you may never have heard of, like Warri, Nigeria, home to Delta City Mall but not well known outside the region.
Informal markets still supply between 85 and 95 percent of all food consumed in sub-Saharan Africa, according to a study by the International Livestock Research Institute, Voice of America reported. Their supremacy is unlikely to be dented by the continent’s spreading formal supermarket chains.
One of the main cities in Nigeria’s oil-producing region, Warri has grown fast, like many other medium-sized Nigerian cities. New housing developments cluster on its outskirts.
Like the U.S., malls in Nigeria have become hangouts for the young and destinations for families. Their rarity — and air conditioning — create a sense of exclusivity, NewYorkTimes reports.
Nigeria has at least 18 large shopping malls, each with at least 10,000 square meters of space to rent (about 108,000 square feet), according to commercial property services company Broll Property Group. An additional 180,000 square meters (close to 2 million square feet) of retail mall space is expected to be on the Nigerian market by this year.
Considering the size of Nigeria’s population — 182.3 million by Jan. 1, 2016 — 18 large malls isn’t that many, relatively speaking. By comparison, the 20 largest shopping malls in the U.S. each have at least 2 million square feet of retail space, according to the International Council of Shopping Centers. That’s about 186,000 square meters per mall, minimum.
Traditional markets still trump formal retail outlets in Africa, and that’s not likely to change for a while, according to an earlier AFKInsider report.
U.S. research group Nielsen tracks retail sales in 14 sub-Saharan countries where traditional grocery stores account for about 50 percent of consumer goods spending. There are more than 550,000 of those outlets in the countries monitored, according to the Nielsen report.
“The most common shopping channel of all is the simple table top: a stand set up on the side of the road or in a local market to capture passing trade,” said Allen Burch, head of Africa Nielsen. “Eighty percent of consumers shop from these table tops, of which there are no less than 200,000 in Nigeria alone.”
Still, older Nigerians see the mall’s value as a family outing, even if they’re skeptical about paying premium mall prices over traditional markets, NYTimes reports.
“My kids enjoyed (the mall),” said Victor Omunu, 53, although he says he would never
shop for himself there. “I bought them ice cream. It’s not bad at all, the mall. I was happy because I was with my family. I even met some old friends.”
The malls are tangible evidence that life has become materially better for many people in Nigeria in recent years, despite the country’s many problems, according to NYTimes.
Besides shops, malls have leisure activities such as food courts and movie theaters.
“These are things we are used to seeing outside Nigeria,” said Mr. Monday, 28, a gas turbine operator, who got his first taste of mall culture when he visited an aunt in Scotland. Now, a mall is scheduled to open in his hometown, Uyo, late this year. “I will be going there frequently,” he told NYTimes.
Exactly how big Nigeria’s middle class is depends on who you ask. South Africa-based Standard Bank, with branches across Africa, estimates that Nigeria’s middle class grew by 600 percent from 2000 to 2014.
The bank projects that Nigeria has 4.1 million households now considered middle class — that’s 11 percent of the total population. By 2030, an added 7.6 million households are expected to make it into that category.
Delta City Mall opened in Warri earlier in 2015. It gets 12,000 visitors a day, according to TheGuardian. The mall was built by Resilient Africa, a South African joint venture that includes Shoprite, the continent’s largest food retailer. Resilient has five other
malls in the works in other cities and it’s looking for four more sites, said Eddie
McDonald, who heads Resilient’s Nigerian operations.
“The retail trade in Nigeria is still in its infancy stage, but growing,” McDonald
Ebere Chukwu, 38, has a shop in Igbo Market, a traditional market. He said he had been to Delta Mall with his family, but just to look — not to shop. “That place looked like abroad, it looked like America,” he told NYTimes.
Chukwu said his longtime customers won’t desert Igbo Market for the mall. The market’s prices are cheaper.
Esther Ogbolu shopped for shoes at Igbo Market. The mall was unaffordable, she told NYTimes, but she liked the air conditioning.
For businessman Matthew Asegiemhe, the future lies in the mall. He opened a clothing store, Button Up, in the city five years ago, and sales increased 15 percent to 20 percent each year. He has a branch in the mall. “Middleclass customers are increasing — that’s why,” he told NYTimes.
Anderson Williams, 25, works for a road construction company. He shopped for pants at the mall and put a leather sofa set on layaway. He said he didn’t mind paying more.
“I love the mall, the whole environment entirely,” he said. “I love the AC especially.”
Sixty percent of South Africans shop in formal retail supermarkets compared to 30 percent of Kenyans, 4 percent of Ghanaians, 2 percent of Nigerians and 2 percent of Cameroonians, according to VenturesAfrica and BusinessDaily.
Modern-format supermarkets have competitive prices but they are not necessarily conveniently located for most buyers, according to Nielsen. This makes traditional markets still very relevant in modern-day African society.