Six rules for engaging consumers in low-income markets

Author: John Akoji

Contributors: Patrick Guyer and Laura Chari

A vibrant economy, bustling markets, and a rich cultural heritage are just but a few words that describe Nigeria. With a wide array of diversified mineral and natural resources, the country is one of the largest economies in Africa, presenting exciting opportunities for expansion in the retail and distribution sector.

Our effort to create sustainable livelihoods for retailers and low-income consumers led us to Osun, one of the smaller states in western Nigeria, a three-hour drive from Lagos. My colleagues and I arrived with a clear plan to navigate in and out of 20 villages.?

Image: ?Focus group discussion on nutrition and breastfeeding habits at Camp Ogunleye

However, as we set out to one of the villages, it became evident that our journey would not be without a few setbacks. Unlike the city, mobile broadband and internet connectivity would be challenging. Despite having an active subscriber base, operators are yet to expand communications technology infrastructure across all parts of the country. As a result, our efforts to make any calls while visiting most villages were quickly shelved. Driving through the villages, we couldn’t help but notice the infrastructural deficits in the rural sector. Inaccessible roads to one of the villages led our team to complete the journey on foot. An experience that was not on our initial plan. Not even the SUV we rode in could take on the road ahead, which had narrowed into an untarred path cut deep with erosion gullies.

It became apparent to me that there is a need for initiatives to widen their reach to remote communities with sustainable economic development solutions. While Nigeria has made significant socio-economic progress in recent years, more effort is still required to reach the under-served rural regions. Villages such as Onida, Ogogo Odeyemi, Daranijo, and Camp Ogunleye experience transportation constraints, low access to electricity and learning institutions.

Reflecting on this trip, I wonder: How do such isolated communities access impactful products and solutions? How can we create innovative goods and services that could be useful and usable in these communities? What strategies would be required to scale solutions in such marginalised low-income communities??

Image: Posters showing different learning channels on nutrition

Over the last seven years, Bopinc has been working across Nigeria to positively impact people’s lives by connecting them to needed goods and services, thereby spurring income generation through entrepreneurship. Our experience working in Nigeria enables us to drive scalable initiatives and interventions.?We give attention to the physical and economic environment, aspirations, and needs of the people we engage in our program.?

Among the questions, we are exploring issues around our responsiveness to the contextualised needs of our stakeholders. For example, are the solutions being developed for low-income consumers a "one size fits all?" Are there distinctions between low-income consumers groups? What should entrepreneurs keep in mind while developing solutions for Nigeria’s rural, low-income market??

The following are some of the solutions that draw from Bopinc’s work in Osun State as well as other projects across Nigeria.

What entrepreneurs need to know about engaging low-income consumers in Nigeria?

The Nigerian low-income market comprises people who may be low on cash but are still well-informed. Low-income consumers know their needs and recognise a solution that can work for them when they see it.

Image: Focus group on farming and storage of fruits and vegetables in Onida community

Here are six rules entrepreneurs should follow to break into these low-income market segments.

Needs assessments: To build solutions for low-income consumers in Nigeria, you have to engage them and determine if their challenges are a priority. Assumptions on what low-income consumers need are some of the mistakes entrepreneurs make when launching and scaling any product for the low-income market in Nigeria.

Needs review: Find out existing solutions, products, or services low-income consumers currently use to deal with everyday challenges. Review and learn how well these approaches meet their needs. The gaps you identify become part of your inspiration for a new solution.

Co-create: Do not create a product in isolation. Products and services with little or no users are unlikely to solve challenges. If the solution is for low-income consumers, let them contribute towards it. Build and test every aspect of the solution to create a sense of ownership.

Affordability: How affordable are the products and services you plan to introduce to low-income consumers? These consumers have little disposable income, and much of their expenditure goes to food and other essential goods and services. Investors and entrepreneurs must plan for small units and low price points to capture the attention of low-income consumers. Affordability is relative, and you must understand what “affordable” really means for your product to the low-income consumer.

Awareness: Most low-income consumers do not have access to print media, television or in some cases, mobile phones. Reach out to them through different channels. The use of town hall meetings, events in open markets, and community groups has been used to create effective product and service awareness among low-income consumers. We have also learned that involving influential and respected individuals as brand ambassadors is viable.

Availability: Ensuring the regular supply of desired products in low-income communities can be challenging for entrepreneurs. Low-income consumers are mostly daily wage earners, purchasing small amounts of necessary products daily or weekly. A common challenge occurs when the product is not readily available. If products and services are not readily available to low-income consumers, they will not hesitate to look for another solution.

Image: An entrepreneur's (Iya Korede) retail and wholesale shop in Ogogo Odeyemi Community Market

Visit our website to learn more on marketing and distribution in low-income markets.