The Nigerian modern retail business is having another kid on the bloc. Maryland Mall, a new shopping mall in Maryland, a major part Lagos city, less than 15 minutes drive to the state capital.
The mall is owned by Purple Capital Partners Ltd, the company said the cost of constructing the property is about NGN5 billion. In mid April, AXA Mansard, the same company that invested USD80 million in Africa Internet Group (Jumia), invested NGN800 million in Maryland Mall to become one of the majority owners of the property.
The mall is sitting on 7,700sqm land space. Its owners said its prime location gives the benefit of about 5,000 cars passing through its front view every hour
The Bigger Picture and Investors
Ten years down the line, Nigeria is witnessing a rat race amongst developers and investors competing for who will build the largest shopping mall in Nigeria. With Lagos as the spearhead of this modern trade boom, Nigeria is host to at least 35 shopping malls concentrated in capitals of South-West, South-South, South-east, North central, North-west and, North-east in that order.
The positive story of shopping malls in Nigeria is a booster to the country’s gross domestic product (GDP). Developers are unrelenting in their quest to take over hotspots for trade and relaxation in major cities. Persianas Retail and Top Services Ltd; two pioneers in shopping development are taking major over major cities naming their malls after the host city. While the former is focused in Lagos planning its Palms 2 (estimated at 30,000 square feet), the latter is pushing further into the South-western part of Nigeria launching new malls.
According to 3investonline.com, Shoprite Holdings Ltd and Resilient Property Income Fund Limited are super bullish. The duo planned over N24.9 billion to build 10 shopping malls in Nigeria measuring 10,000 square meters (108,000 square feet) and 15,000 square metres will be built over the next three years in the capital, Abuja, and the city of Lagos. With lofty ideas, these two conglomerate plan to build the biggest shopping mall in Africa occupying 40,000 square metres.
The Market and Competition
The biggest beneficiaries of the mall boom are not even these investors and their shareholders. The Nigerian people and retailers (local and foreign) have more to be thankful for. The coming of modern retail facilities have positively impacted the lives of Nigerians who were not only restricted to sprawling open markets and unregulated shopping plazas but locked to few brands and zero shopping pleasures. Foreign brands who could not sell in Nigeria have now taken prime spots within major malls in Nigeria. Shopping malls have also busted long time myths about the Nigerian middle class.Brand activation agencies have also leveraged mall spaces and environments for consumer engagements events. It used to be a major headache for researchers, marketers and advertisers to reach the super rich and the middle class beyond the mass media.
Shopping malls have become dragnets for the rich, famous and upwardly-mobile. The growing mall culture has boosted OOH advertising targeting these audiences.It is not all rosy, many brick and mortar retailers who jumped on the shopping mall boom have gotten their fingers burnt. Some foreign retailers also misconstrued the Nigerian middle class and the boom in shopping mall culture as an opportunity to sell for a premium, some scaled too fast and took up spaces in low growth and government dependent states. Still, the biggest threat to shopping mall retailers are eCommerce sites.
The same middle class and upwardly-mobile population targeted by mall retailers are the ones embracing eCommerce sites making them to declare huge Black Fridays sales estimated at N4 billion. The huge CAPEX and OPEX incurred by brick and mortar retailers have nothing on eCommerce sites who only need a good management, smart people and proprietary logistics to succeed. We see a possible mesh in strategy as the way out for shopping mall retailers.
Either opting for an eCommerce supplier (seller) or starting a stand alone site, mall retailers must embrace eCommerce fast. This approach not only scale down their larger than life operations but it cuts OPEX in the short term and CAPEX in the medium and long term.
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