Consumer-goods giants like Guinness Nigeria Plc and Flour Mills of Nigeria Plc are turning to startups to navigate Africa’s vast informal retail sector, where mom-and-pop shops dominate sales.
Driving the news
- Flour Mills acquired a stake in OmniRetail Inc., a Lagos-based startup that connects 130 manufacturers — including Guinness, CHI Ltd. and Dufil Prima Foods — with 150,000 small retailers across Nigeria, Ghana and Ivory Coast.
- OmniRetail links retailers with 14 banks and logistics providers through a mobile platform, providing inventory management and payments services.
- Lagos-based TradeDepot Inc. and others are also targeting Nigeria’s 8 million informal traders, offering consumer-goods makers cheaper distribution and greater reach.
Why it matters
Informal retail accounts for up to 80% of sales in some African countries and supplies 86% of the continent’s labor force, according to the International Labour Organization. For millions of low-income retailers, better access to goods means higher incomes.
By the numbers
- OmniRetail processed ₦1.3 trillion ($849M) in sales transactions in 2024.
- Guinness says it cut distribution costs by 20% using the platform.
- Koolboks, a Nigerian startup selling solar refrigerators to small shops, raised $31M this year and plans to scale production from 7,000 to 72,000 units annually.
What they’re saying
- “The pooling of services creates efficiency for manufacturers, and cost reduction for the last mile retailers,” said Adetilewa Adebajo, CEO of Lagos-based CFG Advisory.
- “For manufacturers like us, the platform streamlines the entire process — from order placement to payment by distributors,” Guinness Nigeria CEO Girish Sharma said.
Between the lines
Poor transport infrastructure is a major driver of digitization. Nigeria ranks 29th in Africa for road quality, according to the Africa Infrastructure Development Index.
Yes, but: Some experts warn that fintech platforms may eventually bypass small traders.
- “As time goes on, the companies and the apps may cut off the retailer to sell directly to the consumer for higher margins, as is the case with Amazon,” said Yele Okeremi, CEO of Precise Financial Systems.
The bottom line
Startups like OmniRetail are reshaping how Africa’s biggest consumer-goods companies reach customers. But long-term success depends on whether small retailers — who power the informal economy — remain part of the equation.
Source: Bloomberg
