In a recent report, NielsenIQ said that Nigeria’s Fast-Moving Consumer Goods (FMCG) market saw a 17.4% drop in the number of transactions this year. Nigerians are struggling with high prices.
In March 2024, the study showed transactions fell more compared to a 4% drop in 2023.
NielsenIQ mentioned that as prices keep rising, people have less money to spend. Inflation was at 34.2% in June 2024, pushing prices up even more.
Growing Despite Problems
Even with these problems, the FMCG market’s value grew by 21.6% in 2023 and 24.8% in 2024.
“This means that people are buying less but spending more on important items,” said Joyce Nwachukwu, Associate Director at NielsenIQ West Africa.
The report also showed that many Nigerians are feeling financial pain, with 81% saying they are worse off compared to last year.
High costs, especially for fuel and food, and a slow economy are the main causes.
Using New Ideas
The study looked at home care, personal care, snack foods, drinks, and other foods. It found that companies using new ideas sell better, even in tough times.
Home and personal care products gained the most, with new ideas boosting their sales by 4.2 times and 2.9 times.
Contrary to common beliefs, the study found that about 52% of new ideas led to higher sales in the second year.
This shows how important new ideas are for business success.
Bayonle Oseni, Head of Innovation Insights at NielsenIQ, said:
“By focusing on new ideas and research, businesses can grow. Knowing which areas need innovation helps companies use their money wisely.”
Faith Wanderi, Managing Director of NielsenIQ East and West Africa, said businesses need to understand how consumer habits are changing. This can help them decide on price changes, new brands, or better distribution.
She said that customers are not loyal to any brands right now, but companies can find ways to connect, such as offering different product sizes.
Need to Know
Nigeria is facing the worst cost-of-living crisis in years. Inflation hit 34.19%, the highest in 28 years. Food prices rose over 40% by June 2024. The rise happened after fuel subsidies were removed in May 2023 and the naira lost over 100% of its value since June 2023.
- The government has tried to help with programs like cash transfers, low-interest loans for businesses, and grants for small businesses.
- Although the minimum wage was more than doubled, many Nigerians still face hardships. This led to “Hunger Protests” across the country last week.