Walmart, the world’s largest retailer by revenue, is in advanced talks to open big box stores in Lagos, Nigeria’s economic hub.
The retailer’s top executive for Europe, the Middle East, Africa, and Canada, Shelley Broader, met this week with Lagos state governor Akinwunmi Ambode. After fruitful talks, it appears the iconic Walmart signage will soon be sighted in Lagos.
Governor Ambode revealed his excitement at the prospect of Walmart opening up stores across the mega-city he governs.
“We have a population of over 21 million people and four million of that population is in the middle class,” said the governor.
He also noted that Walmart would create job opportunities for Lagos’ bulging youth demographic.
“We want to make sure that we attract as much investment in Lagos that can help us to take our youths off the streets and give them employment,” he said.
But neither Ambode or Walmart gave any timing for the first store.
Ambode’s sentiments are backed by the scope of Walmart’s operations as the retail brand is currently in 28 countries and employs around 2.2 million people making Walmart the world’s leading private employer.
Walmart has had business operations in Nigeria, and 12 other African countries, since 2011 when it bought South African general merchandise retailer Massmart. Massmart has six outlets in Nigeria. The new stores will be the first Walmart stores in Nigeria.
Walmart’s emerging challenges
So far Walmart has had difficulties with the international expansion of its brand to emerging markets.
It has been trying since 2013 to gain a foothold in east Africa by buying one of the local retail chains with little success. It also tried to buy Botswana’s Choppies last year. That retailer listed on the Johannesburg stock exchange early this year.
After expansion to Mexico, the Benton, Arkansas company became mired in a public corruption scandal which showed it had paid several bribes in a bid to win market dominance. In an investigative report by New York Times, a former executive provided detail on how Walmart “had paid bribes to obtain permits in virtually every corner of the country.” Investigations revealed questionable payments of up to $24 million.
The company was also forced to close operations in Germany and Korea in 2006 and has faced major challenges in Brazil and China.
Nigeria’s modern retail market is still under-developed and no chain has national presence meaning Walmart will face little world-class competition aside from Shoprite. The South African-owned retailer moved to the Nigerian market in 2005 and now has 12 stores and employs 1,600 people. It has said it believes there is room to open at least 800 Shoprite stores in Nigeria.