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O’Concept, the QSR reengineering snack-on-the-go to flip the market

O’Concept, the QSR reengineering snack-on-the-go to flip the market

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O Event Concept, O'Concept snacks, 12 Basket, Snack business in Nigeria

Beside the road along Adeniyi Jones Ikeja, Lagos, is a blue canopy where multitudes of customers are catered to by a handful of individuals, every weekday morning. At first glance, you’d think that it’s a typical Mama Biliki akara or dundun business. But then you’d be dead wrong because this joint is a snack startup which averages a return of about a million naira monthly. 

“This is a snack startup owned by O’Event Concept, said the manager, Bashiru Muhammad Babajide.

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O’Concept, as it is also called, is a 7-year-old company established by Mariam Olugbemiro without a bank loan or private equity placement. The company has another breakfast outlet within the same area, and its head office is located at Ogba.

[READ ALSO: Nigeria’s decision to sign the AfCFTA might be a grievous mistake after all]

The company is one of the 65% of small and medium enterprises in Nigeria managed by sole proprietors. It began as one of the many SMEs that explored personal savings to raise startup funding of less than N10 million.

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O Event Concept, O'Concept snacks, 12 Basket, Snack business in Nigeria

O Event Concept staff setting up for the day

Overcoming early stage challenges 

Within the company’s second and third years of operations, it struggled to keep head above water, and to create a niche for itself, while competitors like 12 Baskets were waxing stronger in an emerging market.

But all that has changed now. According to Mr. Babajide, the company has a signature taste which maintains customer satisfaction. This is backed by their motto, “Quality is our signature. According to him:

“So we try and build up quality first. With the quality we’ve built, we believe no matter how we come out, we would still break even in the market.

“By God’s grace, we’ve been able to meet up with it to a certain level, and that has really brought our business upright in terms of customers coming continuously because they are getting the taste [they expect]. There’s nothing different, so we’ve been able to stabilise a lot of things.” 

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O Event Concept, O'Concept snacks, 12 Basket, Snack business in Nigeria

For O’Concept staff, business starts from 6 am to after 10 am

Patricia

[READ ALSO: How To Kill A Business….Quickly]

Reengineering snack-on-the-go business 

O’Concept is not your usual snack company such as Mr. Biggs or Tasty Fried Chicken. This is not only because it operates under a canopy, but due to its nonconformity with traditional snacks like donuts and meat pies. The company deals in small chops, grilled fish and chips, asun, fried yam and plantain, among many others. 

Daily, about N200,000 is budgeted as cost of operation, with its snack packs priced at N400, N450, N500 and N550. The startup averages about 100 customers during its operation hours of 8-10 am, with Friday being its peak day. 

Oftentimes, being a late entrant to a market denies companies, most especially small and medium businesses, sizeable customer base, leaving them a bit of the market share, as first movers usually control the base. But for Mr. Babajide, the market is still far from maturity and there are enough innovative ideas to extend the company’s lifecycle. 

[READ ALSO: How SME’s can digitally export their products]

Due to its reengineering of snack-on-the-go, O’Concept has experienced significant growth in the QSR (Quick Service Restaurants) business. Its innovative path has led it to profitability in recent years despite the presence of competitors.  

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“We are the ones affecting their business now. We are springing up. 12 Baskets has been in the market for a while and they have all the facilities; we are just gathering our facilities together… But we are using our products to penetrate the market. The business has been challenging, and at the same time, it has been profitable.” Babajide stated.

O Event Concept, O'Concept snacks, 12 Basket, Snack business in Nigeria

A basket of smallchops

Cashing in on location 

While the company is eyeing expansion, its current location is a strategic move that has aided its growth and profit making. Already, there are plans for a third outlet in Opebi to break new ground. 

Nairametrics learnt that the roadside has increased the company’s visibility and accessibility to customers and prospective clients. “We are working with everybody,” said Babajide. For example, we are working with Jumia, Access Bank, we working with banks and other companies around this area.”

[READ ALSO: A floating loan box: Another wonder in Lagos?]

Although, the company currently has about six employees, startups like O’Event Concept is the reason small businesses in Nigeria have created about 59 million jobs. The company also hires contract staff, depending on the level of demand and supply needed. 

Undaunted by saturation

O’Event Concept is currently in its growth stage, and the company is far from intimidated by the influx of more small and medium businesses. The entry barrier of snack-on-the-go business has continued to drop, giving room for a saturated market, but with competitive price keeping them in check, O’Concept is depending on innovative ideas and quality assurance to continue switching customer-loyalty to cash in.

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: fakoyejo.olalekan@nairametrics.com.

1 Comment

1 Comment

  1. Anonymous

    July 16, 2019 at 3:17 pm

    A well written article.

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Business News

Measures introduced by Nigeria to ensure transparent use of the $3.4 billion IMF loan

Most of the critics of the government’s borrowing pattern have often expressed serious doubt about the judicious use of these funds, as they believe most of them might end up being embezzled.

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Kristalina Georgieva, IMF boss hints at 'synchronized slowdown' in global growth , IMF: 40% of African countries can't pay back their debts , Nigeria worse off, posts grows lower than LIDC benchmark - IMF, Measures introduced by Nigeria to ensure transparent use of the $3.4b IMF loan

Following the approval and disbursement of $3.4 billion Rapid Financing Instrument (RFI) to Nigeria, which is the largest COVID-19 emergency financing package so far released by the International Monetary Fund (IMF), the multilateral financial institution now expects transparent and accountable use of the funds.

The IMF’s financial assistance to Nigeria is meant to support the healthcare sector, stabilise the economy, and protect jobs and businesses that have been severely impacted by the pandemic.

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The Bretton wood institution has been disbursing funds to work closely with member countries to ensure transparent and judicious use of the financial support, while making sure they are used for the intended purpose.

The IMF’s mission chief for Nigeria, Amine Mati, during a conversation, pointed out the measures to be taken by Nigeria in order to enhance transparency and governance in the use of the $3.4 billion IMF emergency financing.

(READ MORE: Infrastructural financing in Nigeria: Why bonds are better than loans)

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According to the IMF chief, the Nigerian Government had committed to undertake an independent audit of crisis mitigation spending and related procurement processes, as well as to publish procurement plans and notices for all emergency response activities which include the names of companies that were awarded the contracts and the beneficial owners.

Mr. Mati also disclosed that special budget lines are to be created to record all crisis emergency response measures, which are published daily on Nigeria’s treasury online portal. These measures will not only ensure that financial assistance received as part of the COVID-19 response is used for its intended purposes, but will also significantly strengthen the oversight of the entire budget used for the government’s crisis response.

Implementing these measures will help to drastically reduce the governance and transparency challenges as well as corruption vulnerabilities of a country like Nigeria. Most of the critics of the government’s borrowing pattern have often expressed serious doubt about the judicious use of these funds, as they believe most of them might end up being embezzled.

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Economy & Politics

The Empirical Truth about an average Nigerian’s price point

NBS in a report about poverty and inequality stated that 40% of Nigerians lived below its poverty line of N137,430 a year.

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The Empirical Truth About an Average Nigerian’s Price Point

Nigeria’s high poverty data is one that we have first, rejected – deemed as untrue, before eventually coming to terms with its sad reality. For a nation with one of the biggest economies of the world, the daunting results speak of a failure that we would rather hide behind the façade of our strong economy or our huge active population.

We, however, couldn’t pretend for long because soon enough, Nigeria overtook India, taking its title of the poverty capital of the world.

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The National Bureau of Statistics (NBS), in a report about poverty and inequality from September 2018 to October 2019, stated that 40% of Nigerians (82.9 million) lived below its poverty line of N137,430 ($381.75) a year.

The Northern states rank poorest with nine of the top 10 poorest states in the country owing largely to the Boko Haram insurgency, massive unemployment rates, low access to healthcare services, and millions of children out of school – all which have been compounded by the COVID-19 pandemic.

In the most recent estimates, the World Bank estimates that 40 million to 60 million people will fall into extreme poverty (under $1.90/day) in 2020, compared to 2019, as a result of Covid-19, depending on assumptions on the magnitude of the economic shock. Even though the stats in themselves are bad, they hold many other truths. One of such lies in the purchasing power of the average Nigerian.

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Poverty and the purchasing power of Nigerians

The World Bank categorizes poverty into three levels: Those who live on less than $1.90 a day, those who live on less than $3.20 a day, and those who live on less than $5.50 a day. Before now, the international poverty line had been set at a dollar-a-day by the World Development Report of 1990. However, it was updated to provide a more accurate description of the real cost of living in different countries.

(READ MORE:NSE, IFC Highlight Gender Implications of COVID-19 in Inaugural Seminar Under the Nigeria2Equal Program)

Being the poorest country in Africa, it is safe to say that the average Nigerian, therefore, falls within the category of less than $1.90 a day, less than $3.20 a day, or less than $5.50 a day. In Naira terms, using an exchange rate of N390 to a dollar, it means the average Nigerian either has N741, N1,248, or N2,145 to spend in a day.

CBN warns high foreign credits could collapse Nigeria’s economy, predicts high poverty , The Empirical Truth About an Average Nigerian’s Price Point

These funds cut across expenses on housing, feeding, clothing, communication etc. The 2019 expenditure pattern report – a measure of Nigeria’s spending pattern in both food and non-food items, revealed that 56.65% of the household expenditure in 2019 was spent on food, with the balance of about 43.35 spent on non-food items.

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Also, a survey carried out by FinMark Trust in partnership with EFInA, just this month, reveals that Nigerian households are beginning to experience reduced income, lower food consumption, and reduced access to financial and health services following the onset of the COVID-19 epidemic and related lockdowns. Consequently, the low purchasing power is now even lower.

Patricia

The implication of our purchasing power reveals two core truths:

  1. Industries that do not cover necessities immediately eliminate a huge portion of the populace.
  2. Even businesses that in core industries that are priced above the minimum spending value of the average Nigerian, eliminate millions of potential customers.

More so, these values represent spending spreads. In other words, with N1,248 to spend on pretty much everything, only a smaller percentage will be apportioned to even the most important cost items.

What this means: A business owner with a core product that costs just N1,000, you are already providing a luxury service in the Nigerian context. Items sold under these price points are like recharge cards, sports betting, sachet milk, etc., tend to make solid businesses as a result of their huge share within the spending capacity of most Nigerians.

In truth, the very essence of market segmentation – the division of a broad array of customers into sub groups, is that all businesses cannot cater to all markets.

However, the allure of maintaining low price points could also mean that Nigerians might be getting less value in order to just be able to afford a product. This goes to show the real purchasing power of Nigerians, and it is as instructive as it is worrisome because clearly, our high poverty rate affects every single one of us.

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Coronavirus

Covid-19 Update in Nigeria

On the 31st of May 2020, 307 new confirmed cases and 14 deaths were recorded in Nigeria bringing the total confirmed cases recorded in the country to 10,162.

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COVID-19: FCMB reschedule operations

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to rise as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 10,162 confirmed cases.

On the 31st of May 2020, 307 new confirmed cases and 14 deaths were recorded in Nigeria.

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To date, 10162 cases have been confirmed, 3007 cases have been discharged and 287 deaths have been recorded in 35 states and the Federal Capital Territory having carried out 60,825 tests.

Covid-19 Case Updates- May 30th 2020

  • Total Number of Cases – 10,162
  • Total Number Discharged – 3,007
  • Total Deaths – 287
  • Total Tests Carried out – 60,825

The 307 new cases were reported from 15 states – Lagos (188), FCT (44), Ogun (19), Kaduna (14), Oyo (12), Bayelsa (9), Gombe (5), Kano (3), Delta (3), Imo (2), Rivers (2), Niger (2), Bauchi (2), Plateau (1), Kwara (1).

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

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The latest numbers bring Lagos state total confirmed cases to 4943, followed by Kano (954), Abuja at 660, Katsina (364), Oyo (292), Edo (284), Ogun (278), Borno (271), Jigawa (270), Kaduna (258), Bauchi (238), Rivers (206), Gombe (161), Sokoto (116), Plateau (105).

Kwara State has recorded 88 cases, Delta (83), Zamfara (76), Nasarawa (62), Yobe (52), Akwa Ibom and Osun (45), Ebonyi (40), Adamawa (38), Imo (36), Kebbi (33), Niger (32), Ondo (25), Bayelsa (21), Ekiti (20), Taraba and Enugu (18), Anambra (11), Abia (10), Benue (7), while Kogi state has recorded 2 cases.

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, President Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

 

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READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

Patricia
DateConfirmed caseNew casesTotal deathsNew deathsTotal recoveryActive casesCritical cases
May 31, 20201016230728714300768687
May 30, 2020985555327312285667267
May 29, 202093023872612269763447
May 28, 202089151822595259260647
May 27, 202087333892545250159787
May 26, 2020834427624916238557107
May 25, 202080682292337231155247
May 24, 202078393132265226353607
May 23, 202075262652210217451317
May 22, 2020726124522110200750337
May 21, 2020701633921111190748987
May 20, 202066772842008184046377
May 19, 202064012261921173444757
May 18, 202061752161919164443407
May 17, 202059593881826159441837
May 16, 202056211761765147239737
May 15, 202054452881713132039544
May 14, 202051621931683118038154
May 13, 202049711841646107037374
May 12, 20204787146158695936704
May 11, 202046412421521090235894
May 10, 202043992481421777834794
May 9, 202041512391271174532784
May 8, 202039123861181067931154
May 7, 20203526381108460128184
May 6, 20203145195104553425071
May 5, 2020295014899548123704
May 4, 2020280224594641722912
May 3, 2020255817088240020702
May 2, 20202388220861735119522
May 1, 20202170238691035117512
April 30, 2020193220459731715562
April 29, 2020172819652730713692
April 28, 2020153219545425512322
April 27, 20201337644102559942
April 26, 20201273914152399942
April 25, 20201182873632229252
April 24, 202010951143312088552
April 23, 20209811083231977532
April 22, 2020873912931976482
April 21, 20207821172631975602
April 20, 2020665382311884662
April 19, 2020627862221704362
April 18, 2020541482021663562
April 17, 2020493511841593172
April 16, 2020442351311522772
April 15, 2020407341211282672
April 14, 202037330111992632
April 13, 202034320100912422
April 12, 20203235100852282
April 11, 202031813103702382
April 10, 20203051770582402
April 9, 20202881471512302
April 8, 20202742260442262
April 7, 20202541661442042
April 6, 2020238650351982
April 5, 20202321851331942
April 4, 2020214540251850
April 3, 20202092542251800
April 2, 20201841020201620
April 1, 2020174352091630
March 31, 202013982091280
March 30, 2020131202181210
March 29, 2020111221031070
March 28, 20208919103850
March 27, 2020705103660
March 26, 20206514102620
March 25, 2020517102480
March 24, 2020444102410
March 23, 20204010112370
March 22, 2020308002280
March 21, 20202210001210
March 20, 2020124001110
March 19, 20208000170
March 18, 20208500170
March 17, 20203100030
March 16, 20202000020
March 15, 20202000020
March 14, 20202000020
March 13, 20202000020
March 12, 20202000020
March 11, 20202000020
March 10, 20202000020
March 9, 20202100020
March 8, 20201000010
March 7, 20201000010
March 6, 20201000010
March 5, 20201000010
March 4, 20201000010
March 3, 20201000010
March 2, 20201000010
March 1, 20201000010
February 29, 20201000010
February 28, 20201100010

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