Economic Experts have warned that manufacturers selling directly to consumers can weaken established distribution networks and reduce revenues for small traders across Nigeria.
The experts in an interview with the News Agency of Nigeria (NAN) on Friday in Abuja said such actions could threaten job security.
The experts gave the warning while examining emerging trends in global trade, adding that the growing shift toward direct sales could intensify competition for local businesses.
They added that such could as well threaten jobs and incomes across Nigeria’s traditional trading chain.
According to them, direct sales are threatening Nigeria’s traditional trading structure, this can disrupt and reshape the trading economy and its arrangement.
“Direct sales by manufacturers can bypass importers, wholesalers and retailers, reducing their market share, sales volumes and incomes, while threatening jobs across Nigeria’s traditional trading chain.
“The shift could also intensify competition for local businesses, weaken established distribution networks and expose small traders to declining revenues as manufacturers increasingly sell directly to consumers,” the experts said.
Dr Chinedu Amadi, an Entrepreneur, Researcher and International Trade Consultant, said Nigeria’s traditional trading system had provided space for manufacturers, importers, wholesalers and retailers to operate within defined roles.
Amadi said the arrangement allowed manufacturers to produce goods, importers to bring them into Nigeria, wholesalers to distribute them and retailers to reach consumers.
Amadi said manufacturers could now identify Nigerian consumer preferences, advertise digitally and deliver goods without relying entirely on traditional Nigerian intermediaries.
He noted that the trend could reduce the role of Nigerian importers, wholesalers and retailers, leading to lower sales, declining incomes and possible job losses across the distribution chain.
He said direct sales could weaken established local distribution networks and make it difficult for small businesses to compete with manufacturers with greater financial and technological resources.
The expert said that the development could also reduce opportunities for Nigerian traders to build businesses around imported goods, while increasing dependence on foreign manufacturers and digital platforms.
He called on relevant agencies to strengthen policies that would promote fair competition, consumer protection and compliance with Nigerian tax, customs and business regulations by both local and foreign businesses.
He advised the government to also improve infrastructure, particularly electricity, transportation, broadband and logistics, to reduce operating costs and enable Nigerian businesses to compete effectively.
Amadi, however, urged government to support local traders and distributors to adopt digital technologies, e-commerce and modern marketing strategies so they could remain competitive in any changing retail environment.
Mr Kingsley Ikeh, another International Trade Consultant, said the expansion of Chinese merchants into Nigeria’s retail market could intensify competition for local traders.
According to him, it concerns mainly the small businesses that lack the financial resources to compete with foreign merchants selling directly to consumers.
He said the development could threaten the survival of indigenous retailers, reduce their sales and profit margins and weaken established distribution networks, thereby, leading to job losses across Nigeria’s informal trading sector.
“Manufacturers should not completely bypass local businesses, it is very wrong, they should rather develop partnerships that allow Nigerian distributors and retailers to participate in modern supply chains.
“The better approach, therefore, is to modernise Nigeria’s traditional trading system rather than eliminate it, enabling manufacturers, importers, wholesalers, retailers and digital platforms to work together,” he said.
Ikeh, while speaking on digitisation, he urged various trade associations to train small businesses in digital marketing, online sales, data management and customer engagement.
He also encouraged the associations to establish stronger partnerships between manufacturers and local distributors.
According to him, my observation is that trading is going digital, technology is actually changing many things, my advise now is that traders should try to adapt to changing global commerce.
“Technology and globalisation are already changing relationships between manufacturers, distributors and consumers, making direct connections increasingly possible,” he said.
Also, Alhaji Isah Ibrahim, an economist condemned the expansion of Chinese merchants into retail trading in Nigeria markets.
Ibrahim called on local and foreign traders to compete fairly, comply with Nigerian regulations and build partnerships that strengthen domestic productive capacity and expand Nigeria’s presence in global markets.
He urged the government to strengthen competition rules, by protecting local businesses from unfair practices, while, encouraging partnerships between manufacturers, distributors and retailers to ensure direct sales create wider economic opportunities.
“Government and the private sector should also support local traders by providing access to technology, training and globalisation opportunities, enabling them to compete effectively in the changing business environment.
“Private-sector stakeholders should adopt a hybrid distribution model, combining direct sales with local distributors, logistics firms and retailers to reduce costs, preserve jobs and improve market efficiency,” he said.
The News Agency of Nigeria (NAN) reports that recently, traders at the Lagos Trade Fair Complex protested against the involvement of some Chinese nationals in retail trading.
The traders said that the practice was affecting their businesses.
Meanwhile, videos of the protest shared on X by Chief Ikukuoma (@IkukuomaC) showed the traders chanting and displaying placards with different inscriptions at the complex.
In one of the videos, a trader said they were protesting against Chinese nationals who, according to him, came into the country to operate as wholesalers but had started selling directly to consumers.
He said that the practice was making it difficult for Nigerian retailers to compete.
“We no longer make sales. If you import goods, they slash their prices lower than our own and sell to our customers,” he said. (NAN)
