A Snapshot of Our Newest Market: Consumer Appliances in Nigeria

Nigeria is the region’s fastest growing market

In 2017, Nigeria’s consumer appliances industry witnessed the fastest percentage volume growth in the Middle East and Africa. Growth is, however, from a low volume base and follows a substantial drop in 2016. The country currently contributes just 5% of the region’s total volume sales.

Household access to facilities is limited and constrains industry growth

Compared to other markets in the region, Nigerian households have relatively limited access to electricity and water supply. This renders ownership of key major appliances, such as automatic washing machines, which require continuous electrical and water supply, pointless for some consumers. Access to electricity is further impeded by the country’s unstable power supply, which experiences frequent blackouts.

Market set to rebound from 2016 economic recession

Due to falling global oil prices, Nigeria witnessed its first economic recession in over two decades in 2016. This also impacted value and volume sales of consumer appliances, which declined over 2015-2016. The industry and economy rebounded in 2017, but the country is set to witness an expansion of its BOP in the long run and this may impact discretionary spending on white goods.

Access to domestic help and second-hand or informal purchases also impacts the industry, but low uptake of appliances presents opportunities for future growth

Most categories of major and small appliances have generally low penetration rates. Access to affordable domestic help is one contributing factor, as consumers rely on these services rather than appliances for cooking and cleaning tasks. Moreover, consumers continue to purchase goods either second-hand or from an informal market of illegally imported (untaxed) cheap products or “fake brands”, skewing the official count of new and replacement appliance sales. Nonetheless, the low penetration rates signify that the industry has room for growth.