Believing and Serving the Bottom of the Pyramid Market in Nigeria

Written by Cassie Lim, Be Movement issue 1 – SINGAPORE, published October 2012

Nigeria. One can have wildly different impressions of this country, depending on where you’re from. Compared to Singapore, these countries are as different as night and day—apart from sharing tropical weather in common.

Whereas Singapore is famed for its safety and cleanliness, Nigeria is known for the warmth of its people and as a destination that is as challenging as it is exuberating. Haresh Aswani, Managing Director of Tolaram Group and Singapore’s Honorary Consul-General to Nigeria, and his daughter, Anusha Aswani, Corporate Communications at Tolaram Group, relate their two decades of experience living in Nigeria and how they successfully served the bottom of the pyramid market in Nigeria with instant noodles.

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Tolaram Group’s long history began in Indonesia in 1948. They’ve since opened offices in other parts of the world—including Singapore. With a strong legacy in manufacturing, the group took a brave leap into the bottom of the pyramid market in Nigeria over a decade ago. It was Haresh who first mooted the idea of bringing instant noodles to Nigeria, a country more than 10,000 kilometres away from Singapore. “I grew up in the instant noodle parts of the world; whether it was Singapore, Malaysia, or Indonesia where I was born,” Haresh explains. It seemed to him a natural move to bring instant noodles into Nigeria, a country that hosted his brother and their family businesses. He made this decision in spite of the fact that Nigerians in general had not even heard of the term ‘instant noodles’.

Based on their experiences in Indonesia, the family felt that the Indomie brand represented excellent taste and quality. He approached Indofood to form a joint venture to enter the Nigeria market. This proved to be a huge learning curve for Haresh as he soon realised he had to create an eating habit in addition to marketing a product.

“The constant in Africa was that they were eating using their hands. Therefore, the notion of eating noodles with a pair of chopsticks or a fork was very foreign to them”. It was a difficult beginning as not only did they have to overcome cultural differences through a large-scale step-by-step advertising campaign on how to eat noodles with a fork; they also had to overcome very real on-the-ground problems, such as a lack of proper infrastructure and logistics support. The group went as far as to set up their own logistics company to distribute their instant noodles. “Getting the noodles out to different parts of Nigeria was a logistical nightmare. We created our own logistics company—which was a devil we didn’t need—but we had to have it in our backyard”.

It took six years for the logistics company to record a profit and an even longer 10 years for the instant noodle product to become profitable. “It was a huge investment for us. What kept us going was belief; and we saw that the market was growing for us, even though the growth was fairly small early on”, Haresh says. “However, because we saw growth, we believed in it and likewise our partners at Indofood did too”.

Fortunately for Tolaram Group, Nigerians took to instant noodles like ducks to water. They also had the support of a strong network of distributors, especially the influential women of the Southwest region. “In the Lagos area the women are well-educated and very powerful as far as distribution is concerned, and it is a tradition that has been passed down for many generations”, Haresh says.

Fast forward to ten years later, not only does Tolaram Group boast the fastest, most modern instant noodles manufacturing plant outside of Japan, instant noodles have become a staple food in Nigeria alongside yam and rice. Indomie has established itself as the market leader in instant noodles with over 70% market share and an annual turnover of USD400 million. Indomie has established itself as the market leader in instant noodles with over 70% market share and an annual turnover of USD400 million.

“It was all from nothing in the beginning and if you want to talk about our success story, that’s the story,” Haresh says. As he reflects on the tremendous successes from the tough beginnings, he continues, “You have to have the drive. Whatever you do, you must have the belief that you can do it. If you have these two things in your head, you can achieve anything you want. It is simple, but it is also very deep. That was what happened for us.’’

Other than marketing in Nigeria, Tolaram Group has emphasized giving back to the society that embraced their products. The IshK Limb Center, their prosthetic limb clinic, set up in Lagos in 2009, is very close to the hearts of Haresh and Anusha. Their eyes light up at its very mention.

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Interviewer: Why the idea of setting up a prosthetic limb center?
Anusha Aswani: My aunt organised and volunteered at a prosthetic limb clinic in Jakarta. She found that it is something very meaningful. We saw there were a lot of Nigerians that have lost their limbs because of motorbikes accidents and we realised there was a need.

At first it was hard to gain awareness because people thought they had to pay for it or, it came with a catch. We had to explain to them that it is free of charge and asked them to spread the word to friends who might need this service. Now, people are flowing in and we’ve provided over 2200 limbs in less than three years at the centre as well as mobile clinics we organise around Nigeria.

Interviewer: What do you get out of giving away prosthetic limbs?
Haresh Aswani: It is an amazing feeling when you see a person coming in missing a limb and walking out on their own that afternoon. I mean, you cannot buy that. You cannot buy that feeling anywhere in the world. It is just a huge sense of pride for us.

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Anusha Aswani: Some people have had missing limbs their whole life. I met a young man who lost his leg when he was just two years old. He grew up for 20 years without a leg, walking around with crutches all the time. One day, he came into our IshK Limb Center and walked out on his own. It was incredible.

Haresh Aswani: It is extremely emotional to see that; whether they are old people, accident victims or the poor. We do it for beggars as well and, at the same time, we try to convince them that begging is not the only way to live.

Interviewer: How do you teach them to fish? As beggars, begging is probably what they have known for a long time.
Haresh Aswani: We try to hire them into our company. In fact, we are trying to employ at least 25 percent of our patients. We hire patients who are seeking jobs, are willing to work and want a change in life. Although, there are people who are so used to charity that they choose not to work and continue with their old lifestyle. We can’t force people; we can only give them an option, and it is up to them to take it.

Interviewer: I understand that you are embarking on another project with the World Toilet Organisation (WTO) on improving sanitation in Nigeria.
Anusha Aswani: Having grown up in Nigeria, I am working with the WTO to give back to the country. There are hardly any sewage systems in Nigeria, and it is all very primitive: some people even excrete in the open, in extreme cases. Public schools hardly have toilets, although private schools do.

I went to visit a school with five hundred kids, and they only had three cubicles for all the kids. The toilets were in a dismal state. The ammonia hits you in the face so strongly that the kids just go onto the grass somewhere. It is amazing what we take for granted in developed countries, and I would like to improve the sanitation situation in the less developed world. Currently we are trying to set up the foundation to do this properly, starting with the rural parts of Lagos and hoping to extend from there.

But sadly, a lot of rural Nigerians expect charity. The WTO does charge a very low cost for the toilet, allowing the locals to small profit, thereby making the project self-sustainable. Although the community has income, it is not much. Therefore, we will try to do a micro-finance scheme for them to pay back within a certain number of months or work on a cooperative scheme where the community puts in the money together and buys communal toilets. None of the profits will go to Tolaram Group; we are simply doing this to help the country that has given us so much.

Interviewer: What has Nigeria given you? What do you appreciate about Nigeria?Haresh Aswani: First of all, if you’re doing business or working in this world, you should be colour-blind. That was the biggest lesson that the Nigerians gifted me. They do not look at race or religion. No matter where you come from—whether you are Chinese, Indian or Lebanese—to them, you’re just people.

Anusha Aswani: Yes, the people there are very warm. If you are walking along the streets and a random person sneezed, everyone will say “bless you”.

Interviewer: What do you hope to do for Nigeria?
Haresh Aswani: Apart from creating brand names and products that are number one in our country, we also intend to leave behind our mark in infrastructure projects that would actually change the face of the Nigerian economy for the next decade. We are doing this by building a deep sea port that is slated for completion in 2015. It is by far, the largest infrastructure investment by a Singaporean company in Nigeria. We do this because we believe in the country; and therefore, we do things for a country that most of the rest of the world does not believe in. It is important because Nigeria is home to me.

Interviewer: What about Singapore: what do you appreciate about Singapore?
Anusha Aswani: First and foremost, the safety. It is a country where I can go out late at night and my parents are able to sleep soundly. In Nigeria, I have a driver who I tease and call my bodyguard because he will not go home until he has dropped me home. When you compare Nigeria and Singapore, Singapore is five years younger than Nigeria—but look at where Singapore is compared to Nigeria in less than fifty years! They are still developing and here, Singapore is a first-world country. It is hard to imagine the difference just from five decades. Two very different countries on two very different paths.

 

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