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Nigeria’s economy holds enormous potential for middle class – Patti

By BusinessNews Staff on June 8, 2014

The Chief Executive Officer of Cartier Africa, Mr. Alessandro Patti, says Nigeria’s middle class will boost the economy in the future. He also believes the country is passing through some tests to become stronger, in this interview with Ozioma Ubabukoh

There is so much pessimism here within the country even after the rebased Gross Domestic Product figure. How does the global business community see Nigeria?

We can only see Nigeria’s economy through macro-economic indicators. We can see Nigeria as the biggest economy (in Africa). You are the most populated country in Africa, and you have a stable democracy, which is not so common in Africa before now.

Of course, on the other hand, like in every emerging economy, there are obvious contradictions. If Nigeria were not so strong, there would not be so many contradictions. But the perception within the global business community is one of high potential economy with an enormous potential for the middle class.

Overseas, we see in Nigeria a very stable economy. For example, the way people are going for education. In Europe, for the last five years, you see many Nigerians in various universities. More and more Nigerians have dual nationalities that have big voice in Africa; so strong, secure.

So once again, we see macroeconomic indicators. We quote from international research companies and their findings on Nigeria are very positive. Yes, the country is passing through different tests to become stronger.

You once mentioned your experience in emerging markets. How will your experience in other emerging markets help your work here in Nigeria?

Our goal here (in Nigeria) is to implement the correct business model at the correct time. This is because if you open too early a retail network, but on one side, the rising middle class is not ready yet, but there are just a few hundreds of very rich people, your business model will fail because you have structured to make volumes but the clients cannot still afford your products.

This is just what we think, but it applies to other luxury brands. The way they structure important investment in retail made them fail because there are not enough clients.

Our main task here is to size up the real dimension of the potential (of the Nigerian market) this year, in three years, in five years, in 10 years. Then we would be ready with the correct network, the correct business model. How to avoid a non-profitable investment, that is the biggest challenge, we have. We have a success story in China. We entered before anyone else in 1992 and we started opening stores in major cities, and while the middle class was rising, we were opening stores in minor cities in order to sustain an organic growth.

Let me give you another example: Without mentioning any name or country, there was the global brand that said, ‘There is a huge potential in the country, so let’s set up in this country with our name, our products. We are absolutely welcome worldwide; this country will soon accept our products…’ They failed.

The local clients in Nigeria, they don’t know Cartier, but they know Polo. So you need a very strategic, well-known and well-respected partner. So to succeed in a new market you need a good partner that is spreading out the message. We cannot do without it; we need a good partner.

For example, there are other strong economies in Africa but we don’t have the right partner there. So we are not able to make a long-term ambition there. Much of the time what you have are dealers who come to you and say, ‘Give me the products, I’ll double the profits in two years.’

In brief, the answer to your question is, we need to set up the correct business model according to the potential of the market and open big stores that will satisfy the needs of our clients. Also, our desire is to set up a long- term business with a very strong local retail partner that is strong in the area of service, knowledge, finance.

So there is need to be careful going into an emerging market because many times, global brands want to go into an emerging market and they want to do what I call, the big offer.

What kind of business partnership do you have with Polo Group?

This is my first trip to Nigeria and I met with Polo Group CEO (we met before in Switzerland a few times), but the goal of this first visit is to investigate…what I’m saying is, it may be too early to say what Nigerians should expect from us in the next five years.

But part of what we are here to do in this first trip is to see how wide is their distribution network, and to cite our business. Then, when we have done a diagnosis of the market, I will be able to answer you.

I can say for sure is that Nigerian clientele in Nigeria and abroad, especially those based in Europe, are among the top clients for us. So we want to bring them the best service in Nigeria through our partnership with Polo and abroad, through the service of our offering to them.

How do you then support your products and with the price tag that your products come with? Do you think Nigerians can afford them?

We sell our products through diversified strategies. In Europe, we have also online sales, so you can buy our products online. This also obtains in United States of American and Japan. We have evidently, a massive media campaign; most of the media campaign is through top quality newspapers and top quality magazines.

We also have Cartier movie campaigns. Every two years, we produce a short movie. The last one was produced a year and half ago. Another way we promote our products is through CRM activities, contacting our clients directly, and our boutique clients.

This is because Cartier distributes its products primarily through two channels: We have our boutiques and then we have dealers, and one of such dealers is Polo Group. Our boutique owners directly contact customers through catalogues, cocktails. These are the main channels through which we support our own products.

Then as regards the matter of price, I will say it is a matter of income availability. What is super expensive for one person can be extremely cheap for some So the price positioning is absolutely a personal point of view. This is why it is said that the difference between the man and the boy is the price of the toy.

What we want to do is that we have a very wide category in watches, jewelries, in accessories, in leather goods, and we have entry price products for those who have the dollars. We have a wide collection of products and our goal is satisfy the expectations of our clients. We target giving super quality products; that is our goal.

Given the nation’s rebased economy, what is your projection for the luxury goods market in the next five years?

We expect it to grow stronger and stronger. We have faith in the Nigerian economy; we have very strong faith in the Nigerian enterprise and we are very sure that if we measure government policies at the macro level, privatisation and investment in the agricultural sector, we will certainly make headway.

We believe that the growth of the economy can even be stronger and stronger; and when that happens, we will have more of our citizens joining the middle class and that opens up businesses.

While projections in terms of actual figures is difficult to ascertain, I just believe that the prognosis are very, very strong. The potentials can only get stronger and stronger. Other sub-sectors are also showing positive signs.

What is your view about the Nigerian business environment?

Nigeria is a country where if you work hard and you are prepared to take a long-term position, if you are prepared to make the necessary sacrifices, if you are prepared to go through the difficulties, at the end of the day, the rewards can be outstanding more than in Europe or any matured markets of the world.

In those other mature markets, even though you don’t have to put in so much in terms of efforts to achieve success, the rewards are actually meagre. But I believe that Nigeria is a land of huge opportunities, and not only of challenges. But these opportunities cannot be your lot if you are looking for the easy life. If you are looking for the easy life, forget these huge opportunities

[Punch]

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