By Vivian Emoni
Long before colonial structures took root, Nigerian trade thrived on highly organised networks of open-air markets, powerful merchant guilds, long-distance trade routes, and sophisticated local currencies.
When European firms like the United African Company arrived, traditional traders didn’t fade away; they adapted, positioning themselves as the indispensable bridge to the rural masses.
This brilliant economic resilience birthed the legendary open-air mega-hubs that define Nigerian commerce today; from Lagos’s bustling Idumota and Balogun markets to Onitsha’s Main Market, Aba’s Ariaria, and Kano’s historic Kurmi Market.
Inside these vibrant spaces, a strict, time-tested hierarchy of importers, wholesalers, and retail hawkers continues to serve as the unbreakable backbone of the nation’s economy.
In this ecosystem lies the journey of products from creation to the end consumer which relies on a structured, multi-tiered network.
This traditional chain maximised geographic reach and operational efficiency through clear division of labour
Manufacturers focus on research and development as well as mass production, selling in bulk to wholesalers to secure steady revenue and clear warehouse space.
Retailers then buy smaller lots from wholesalers to manage storefronts, curate selections, and serve the public. Finally, consumers buy individual items from local retailers for convenience, immediate availability, and trust.
Nonetheless, as rising inflation squeezes household budgets, local manufacturers are bypassing traditional distributors to deliver wholesale prices straight to doorstep.
Economic experts have warned that manufacturers selling directly to consumers could weaken established distribution networks and reduce revenues for small traders across Nigeria.
According to them, direct sales are threatening Nigeria’s traditional trading structure; this can disrupt and reshape the trading economy and its arrangement.
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.
He said manufacturers could identify Nigerian consumer preferences, advertise digitally and deliver goods without relying entirely on traditional Nigerian intermediaries.
Amadi 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.
Amadi advised the government to also improve infrastructure, particularly electricity, transportation, broadband and logistics, to reduce operating costs and enable Nigerian businesses to compete effectively.
“Government should support local traders and distributors to adopt digital technologies, e-commerce and modern marketing strategies so they can remain competitive in any changing retail environment,’’ he said.
Mr Kingsley Ikeh, another international trade consultant, said the alleged expansion of Chinese merchants into Nigeria’s retail market could intensify competition for local traders.
According to him, this mainly concerns 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 digitasation, 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.
Ikeh said he had observed that while trading was going digital, technology was actually changing many things.
“My advice 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.
The News Agency of Nigeria (NAN), reports that recently, traders at the Lagos Trade Fair Complex protested against the alleged involvement of some Chinese nationals in retail trading.
The traders said that the practice was affecting their businesses.
Videos of the protest shared on X by Chief Ikukuoma (@IkukuomaC) showed the traders chanting and displaying the placards at the complex.
In one of the videos, a trader said the traders were protesting against Chinese nationals who 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.
Dr Rosemary Yusuf, an entrepreneur and a retired public servant, reacted to the trend.
Yusuf said the growing participation of foreign nationals, particularly Chinese traders, in Nigeria’s retail and distributive trade sector.
She warned that the trend threatened domestic enterprises and employment.
Yusuf said the development raised important questions around employment protection, fair competition, investment policy and the integrity of Nigeria’s immigration and business-permit regime.
She said Nigeria’s distributive trade sector was a major source of employment and livelihoods, particularly for MSMEs.
She noted that the sector employs roughly 27.5 per cent of Nigeria’s workforce.
Millions of citizens rely on the wholesale and retail trade of consumer and industrial goods, including textiles, electronics and ICT accessories, auto spare parts, tyres, electrical and plumbing equipment, and household supplies.
She lamented that the increasing penetration of foreign traders into the retail segment therefore deserves urgent policy attention.
Alhaji Isah Ibrahim, an economist, also condemned the alleged 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.
Observers say that to address the disruptive effect of foreign retailers in the Nigerian market, there is a need for a regulatory framework, structural boundaries, and the strict implementation of extant trade laws.(NANFeatures)
News Agency of Nigeria (NAN)
