In 1988, Nigeria's Gross Domestic Product (GDP) was $23 billion and life expectancy for the country's 91 million people was 46 years. GDP per capita was $256 and about 78% of the population lived under $2 per day. By this time, the country has already experienced six coups in its 28 years of existence and a Military General was currently the Head of State. This was a very poor nation and worse still, a very volatile one. Anything could happen.


Two brothers and executives from Singapore, Haresh and Sajesh Aswani who had been selling textile paid little attention to these statistics. From an initial importation of two containers of Indomie noodles, The Tolaram group has managed to build Indomie Instant Noodles to the eighth most-purchased brand in the world. With more than 4.5 billion packets sold per year and a staggering yearly revenue of $700 million.
How were these East-Asians able to build such a successful business in one of the most difficult places to do business on earth? How were they able to grow an 18 cents-per-packet product to a billion-dollar business?

Here's another story.

Opay became popular in June 2019 when it introduced its Oride bike-hailing service with a promo of N100. It had actually begun in July 2018 when it started using a network of agents to reach Nigeria's 36 million unbanked population. By August 2019, it had over 40,000 active agents across the country and $5million in daily transaction volumes.


However, the Opay story does not begin there.

Opay had been operating since 2010 as Paycom Nigeria Limited incubated by Telnet Nigeria Limited as a mobile payment platform. After seven years in operation, Opera decided to purchase the company in 2018. It doesn't even begin there.

Now let's look at the parent company.

In 2006 a Norwegian company, Opera Group ventured into Africa with its mobile browser Opera mini. A time when only 5.5% of the 142 million population even had access to the internet. As of August 2019, opera had the second-largest market share of mobile browsers in Nigeria and the second-largest in Africa after Google's Chrome. Of over 460m internet users in Africa, Opera has about 120m using its mobile browser.
Opera's second quarter (Q2, 2019) report recorded a $4million income gain (including non-cash gain in from Opay's increased valuation) and today, Oride does as much as 100,000 rides daily - more than Gokada and Max.ng. In fact, the competition was so fierce Gokada had to suspend operations for a couple of weeks to restrategize.

How were these foreigners able to scoop up so much market shares from these industries? What do these foreigners understand about Nigerians that we don't?

I will break down what I believe these foreigners discovered about doing business in Nigeria. Don't forget, Tolaram almost shut down operations in 1998 and began making a profit after 20 years. So, they too made mistakes, but they learnt something new, something we probably can all learn: how to sell to Nigerians.


1. Patience and long-term view

Today Tolaram controls more than 74 percent of the instant noodles market in Nigeria and that's a drop from 2006 when it was a complete monopoly. It now has 17 manufacturing plants in Nigeria and manages a fleet of over 2,000 trucks for its logistics.
However, it took Tolaram 20 years to gross $100m and a few more years to realise a profit-making formula. They were patient about growth, however, they were inpatient about profit. They realized that they were targeting the needs of Nigerians who were generally poor and decided to make long-term investments by cutting cost, so they moved the noodle manufacturing to Nigeria. Today, with an investment of $330 million, they are building the busiest port in Lagos.


Opera the company behind Operamini and Opay had actually been in the Nigerian market for about 13 years. During this period, they patiently studied the market, demography, customer behaviour; mapped out what worked and what did not with hard data. Jeff Bezos says it takes at least 10 years to create an overnight success. Today Opay is rapidly expanding and if you don't know the back story, you keep wondering how they figured this out in so little time.


Since these two businesses figured out the right formulae, they have both been executing like a well-oiled machine. Tolaram has had a compound growth rate of 36% since 2001. Once profit formulae is discovered, the growth of the enterprise tends to be explosive. But this takes time and continuous process innovation.

Tolaram Revenue Growth since 2001 - image 3






2. Study customer behaviour and create a great product around it
I know this sounds cliché but it's too important. Tolaram observed that as the economy developed and traditions began to evolve, more women were getting into the workforce. They needed tasty meals that could be made faster for their children. Tolaram found its market; provide tasty meals that can be made in 10 minutes. The product strategy appealed to a population with an annual per capita income of $257 at the time and this population was exploding. They had struck gold.


Here's a little twist on Opay. Opay wasn't the first company that began financial solutions services in Nigeria. In fact, compared to Paga, it was a latecomer, however, they came with a superior strategy. Opay knew that to ramp up its financial solutions service, it needed to build a transactional structure around its payment platform. It needed to offer other services that would utilize its financial platform. It quickly diversified. Note; Opay diversified rapidly into areas that were new, relevant and with its target demography in mind: millennials.
Young people lack enough experience to be afraid, so they are open to change. Opera, a browser mostly used by young people, understood this principle and diversified into the most relevant touchpoints for these people. The results reflected in the volume of transactions.
Let's compare results with Paga


(I love Paga by the way, I used their payment platform for my first e-business a couple of years ago and visiting their office was a level of inspiration for my partners and I).


Paga got its full operating license in 2011 and by 2017 (6 years later), they had reached 5 million users, 20% of whom were active. Between 2015 and 2016 they had handled transactions of almost $800 million.


Opay in one year of its founding does an average daily transaction of $7 million which roughly translates to $2.5 billion annual transactions. This is in contrast with Paga which so far has done $4.2 billion since its inception in 2011 (9 years) or even Flutterwaves' $2.5 billion since 2016 (3 years).


What did Opay do differently?

Opay added new verticals ontop of its payment platform. Remember, the actual goal is Opay. The other platforms are to feed it with transactions. I'm sure you're wondering why this is important. Let me put it simply; the higher your transaction volumes, the higher your valuation. Higher valuation means potential higher exist for investors. These verticals include Oride, Obus, food delivery (Ofood), wealth management (Owealth) and Ocash loans, turning this baby into a super app. Of course, I may not entirely support this steroid growth, but I think if managed properly, will still turn out a major success.

So you see the Double Play Strategy? they're not really losing. The "lose" money offering freebies on Oride and make it up on Opay. These touchpoint or verticals are actually Opay's great strategy as a result of understanding customer behaviour and building a great product around it.


3. Finance and marketing
The Vaswani brother began with two containers of Indomie noodles, however, the real boost came when they moved manufacturing to Nigeria. They have invested over $350 million so far. Tolaram had to build what Harvard innovation experts call "interdependent architecture". *when a product or delivery of the product is not good enough, the company which provides the product has to create an interdependent system, i.e; integrate across multiple components in the value chain to better manage interfaces across these components. Tolaram in its case provides its own electricity, manages a fleet of over 2,000 trucks for its logistics and bought a Palm oil factory (palm oil is a necessary ingredient in making noddles).

To succeed in Nigeria, you need money, lots of money. This is especially so if you're introducing a new product to the market. You have to educate potential customers. Just like in Tolaram's case, "Many people initially thought we were selling them worms," - Deepak Singhal, the CEO of Tolaram Africa. In 2016 alone, according to a document by Dufil Prima (Tolaram's subsidiary under which Indomie is run) spent N8.2 billion on marketing expenses.

Finally, just to throw some more light on marketing, it is important to put into perspective the cultural differences in Nigeria. Nigeria should be seen more like a cluster of regions with varying cultures rather than one country. For example, in the north, women's involvement in the workforce is much lower than in the southern part of Nigeria. Also, the man usually does the grocery buying while the woman spends a longer period in the kitchen cooking. This does not agree with the concept of Indomie's fast food option and that's why consumption per capita is lower in the north than in the south. The literacy rate and internet penetration are also lower in the north. So the best strategy for customer acquisition would be more traditional means like radio and TV because that is what men (usually the buyers) engage with. In the southern part of Nigeria, people are more fast-paced, literacy is high, so is internet penetration. This means the best marketing strategy would be reaching the customers via digital platforms. In indomie's case, the active buyers are the youth (12–30 years) and they successfully target this group with social media engagements. Customization promotion channel is key especially when culture differs. In Nigeria, you must market taking psychography into consideration and do it with intensity and consistency.

In 2019, Opay raised $50 million, much more than what Paga and Paystack have raised combined. This helped it integrate its verticals and market aggressively using what always gets Nigerians: Awoof!


Extra: You need God.
I know it sounds funny but trust me, you need God to succeed in Nigeria. Luck isn't even enough because you can run out of that. It's a tough place to do business, but with the necessary knowledge and information about how Nigerians defy basic economic principles and perseverance, sprinkled, no, soaked with the faith, you're good to go.

*Psychographics is a qualitative methodology used to describe consumers on psychological attributes. Psychographics has been applied to the study of personality, values, opinions, attitudes, interests, and lifestyles

My name is Klein Udumaga


https://medium.com/@kleinuduh/how-to-sell-to-nigerians-the-tolaram-indomie-makers-and-opera-story-part-1-397e2438bb28

Wow inspiring. I will soon be Announcing my new business soon. The system is on ground. By the time it fully kicks off and the public is aware, it will move most of our youths into millionaire class. I mean it. I am still putting together my team. Systems are being set up. Technology is really gulping funds. But this story just gave me the back bone to continue. By 2022 Nigeria will have one of the highest population of millionaire youths in the world. Our system will soon be launched beginning from the SE, SW and SS. I pray those boys up north should stop throwing bombs and go to school so that we can add them to the list.

Amazing! Can't wait to see what you pull off

HallaDaTruth:
Wow inspiring. I will soon be Announcing my new business soon. The system is on ground. By the time it fully kicks off and the public is aware, it will move most of our youths into millionaire class. I mean it. I am still putting together my team. Systems are being set up. Technology is really gulping funds. But this story just gave me the back bone to continue. By 2022 Nigeria will have one of the highest population of millionaire youths in the world. Our system will soon be launched beginning from the SE, SW and SS. I pray those boys up north should stop throwing bombs and go to school so that we can add them to the list.

Speak2klein:
Amazing! Can't wait to see what you pull off

Amen by God's grace. Hopefully we should kick off before middle of the year

God is your strength bro. Looking expectantly for a mind blowing concept. I too wana be a millionaire.

HallaDaTruth:
Wow inspiring. I will soon be Announcing my new business soon. The system is on ground. By the time it fully kicks off and the public is aware, it will move most of our youths into millionaire class. I mean it. I am still putting together my team. Systems are being set up. Technology is really gulping funds. But this story just gave me the back bone to continue. By 2022 Nigeria will have one of the highest population of millionaire youths in the world. Our system will soon be launched beginning from the SE, SW and SS. I pray those boys up north should stop throwing bombs and go to school so that we can add them to the list.

I hope people read and learn from this article.