According to a recent World Bank report [PDF], by 2022, the number of poor people in Nigeria is projected to reach 95.1 million – more than 40 percent of the population.
A 2022 report by the National Bureau of Statistics (NBS), shows that Nigeria’s annual inflation rate accelerated for the third straight month to 16.82% in April 2022, from 15.92% in March and follows the trend of a global surge in commodity prices.
For Nigerians, the end result is a huge depletion of their purchasing power and ultimately, less money.
Indeed, while there were 133.5 million active bank accounts in the country as of December 2021, 99% of those accounts had less than 500,000 naira ($1,200).
To cope with this reality, businesses lare turning to sachet marketing which is defined “the effort to increase market penetration for one’s product by making it available in smaller, more affordable packs…a tool for penetrating the market at the bottom of the economic pyramid.” In recent years, brands have ramped up the strategy, as a new economic reality set in. These products are now sold in even smaller sachets
Fast-moving consumer goods businesses (FMCGs) adopted it for items like powdered milk and instant noodle packs. This, Shakirudeen Taiwo, a Nigerian economist explained allowed the companies to cater to up to 80% of the market.
“As at last count, we have over 75% of households in Nigeria living below $3-5 per day, which is huge,” Taiwo said. “So, companies start modelling their products to fit this income bracket of people since they make up the bulk of the population.” Doing this helps businesses reach more customers and maximise profits as they can sell more products at a cumulatively higher price. But more importantly for buyers, it cushions the effects of inflation even if they have to sacrifice quantity and in some cases, quality, too.