COMPETITIVE STRATEGIES OF CHINESE-OWNED RETAIL BUSINESSES IN NIGERIA: MARKET IMPLICATIONS AND PATHWAYS FOR SUSTAINABLE COEXISTENCE

Abstract

The retail sector is no doubt an important component of economic activities in Nigeria, contributing to employment, entrepreneurship, consumer access and the distribution of goods and services. The increasing presence of Chinese-owned retail businesses in Nigeria, however, has introduced new competitive pressures and raised concerns about the ability of indigenous retailers to remain competitive. This study therefore examines the competitive strategies employed by Chinese-owned retail businesses in Nigeria, their effects on indigenous retailers and the lessons and policy options that can promote sustainable coexistence. Adopting a mixed-methods approach involving qualitative analysis of semi-structured interviews and supporting questionnaire responses, the study examines issues relating to pricing, sourcing, supply-chain efficiency, product availability, customer service, digital marketing and business networks. The study finds that Chinese-owned retail businesses derive important competitive advantages from direct sourcing, bulk purchasing, supplier relationships, competitive pricing, product availability and established business networks. It also finds that indigenous retailers experience pressure on prices, profit margins and customer retention, although competition has encouraged some Nigerian businesses to improve customer service, adopt digital marketing, diversify their products and explore alternative sourcing strategies. The study argues that Chinese-owned and indigenous retail businesses can coexist where competition is supported by fair regulation, stronger local business capacity and constructive business relationships. It therefore recommends improved access to finance and training for indigenous retailers, greater adoption of technology, stronger supply networks, effective enforcement of fair competition and increased cooperation between Chinese-owned and Nigerian-owned businesses.