Nonso Umar is the CEO and founder of Narada Trading, a Lagos and UK based company. Prior to starting up Narada Trading UK a year ago, he worked briefly for UBA Capital. Nonso is not only an entrepreneur but is also interested in building a path as an investor and is due to undergo the CFA exam. He holds a BSC in Computer Science and a MA in Political Economy from the University of Manchester where he wrote articles for the University Newspaper( The Mancunian). He was also a committee member of the Manchester University Trading and Investment Society (MUTIS) and holds an additional masters in research n International Development from the University of Bath.
Below is a transcript of the chat:
Gbemiga: Hi Nonso, thanks again for having this chat with me. How are you doing today?
I am great thanks. How is everything?
I am well. So Nonso, how did you start getting involved in the wine and exporting business?
It started about two or three years ago when I first moved back to Nigeria with my mum. I was close to Balogun Market; I often chatted with a lot of local traders and other importers. I was looking for the best way to venture into the market. I first started off trying to get into the fake hair business which was cheap hair for N1000. I had the connection from China but in the end I decided to go with wine instead, as it was also a fast moving product. So I got in-touch with over 50 possible wineries and wine producers. A few got back to me with plans to partner me in the Nigerian market. They sent samples, which afterwards was sent to my potential wholesalers in the market and we started off from there.
Do you have a preference in the type of products you import?
Yes, the ultimate goal is to build a wine portfolio and have a private label for sparkling wine. Right now, my focus is on entry level wine. Mostly red, as Nigerians prefer it to white wine. At the moment I’m importing wine from Germany- Black Tower. Also I am in the process of arranging one from Spain- Rey Viejo. This is in an attempt to build a portfolio of good cheap wine for value from such areas while moving towards more exclusive wine from wine collectors.
Interesting. What challenges did you face in starting off this trading business?
Laughs. Major challenges in Nigeria are a lot! Receivables for example- It is hard selling on credit and chasing wholesalers. Also, getting your wine registered with NAFDAC is very expensive, long, and tedious. The costs of goods is also something you need to keep in control otherwise you will eat into your profits. Starting off the business from Nigeria is also an obstacle because it’s hard to gain the trust from the wine producers. Most of them ask for ridiculous documentation before they even show any interest in speaking to you. Gaining the trust I have to say was initially the most difficult part.
So prior to the business how knowledgeable were you on wine? Did you often meet people who claim to be in the business realm but really were frauds who want to make quick money?
Oh no, I had zero knowledge on wine. I really just wanted to get into business. Like I said earlier on, I was going to go into artificial hair. However, I thought of something better to exploit the lower mass consumer market. There are a lot of people in the wine industry. It is very saturated as it is. The problem of regulation might stop a few people, also the relationships with wholesalers are a major problem. So it is difficult to make quick money. You have to put the effort in. In terms of being fraudulent- there are a lot of fake wines out there. They allegedly import wine from China and label it in Nigeria as Spanish or French.
This must explain the reason for some low- priced wine out there. Is Nigeria your primary market? If so, how are you able to run it being that you are currently based In England?
Yes Nigeria, then I hope to spread around West Africa. Ghana seems like a promising country to spread my trading company too. To your latter question, It is difficult, however luckily for me I already had established relationships with wholesalers in the Tradefair and Balogun markets. They buy it in bulk so it makes things a lot easier. We have a small storage area where I keep wine ready and safe. I also have some help from family members, so being in England makes It easier to contact producers. I have a company registered here in the UK, so I can build that trust, go to wine fairs, events, see and talk to me as opposed to me emailing out of Nigeria. All my meetings are easier to schedule, so sourcing wine from the UK is importing. The actual sales has to be on ground in Nigeria, and that is hard to monitor from here. I leave the final transactions in the hands of small number of family and staff.
So without revealing too much, what is the future of Narada Trading? Also, are you interested in teaming up with other importers to aid your company?
Oh no, it is very much a solo mission. For 2015, I want to bring in one more type of wine into my portfolio, and push things from there. I hope to learn from my previous mistakes, I only just had my first container last year. So I still have a tremendous amount to learn. 2015 will be the year of mistakes, re-strategizing, learning and tweaking things. But generally, It will be a step forward in achieving the ultimate goal of being one of the top wine and spirit importers.
To achieve this, wouldn’t you need a lot of capital? And have any older people influenced your decision to keep pushing to be the top wine importer?
It is honestly quite the opposite. It requires a lot of capital yes as most producers want money up front. But generally many, I would say 90 percent of the elder businessmen I know advised against it. Even my mother at some point had doubts. But I guess I am just a stubborn person! The reason I was advised against it is Wine is probably the market size is halved as half our population don’t drink. Also, the industry is saturated and dominated by Equal Group who have over 30 percent of the market share. So It’s seen as a tough business to venture into. But honestly Gbemiga, I like the industry and lifestyle of the wine business. I like being able to offer customers a decent wine for a good price in order for them to have a good time. And I love being able to introduce the Nigerian market to producers willing to expand their market. It is a truly fulfilling experience. When people say ” I bought your wine and finished a whole bottle myself” makes me so happy.
However, has this disrupted your social life? Also, are you are you currently involved in other ventures?
No It hasn’t disrupted it yet. When I’m back in Nigeria it would be more of a commitment. At the moment I’m trying to establish my company and sourcing wine. But at the same time, I am currently involved in procurement of IT supplies and equipment. So bidding for government agency contracts through portals and low value contracts between 1-100k. So supplies laptops, CPU’s etc. These are keeping me busy while I wait to sort out my immigration status here. I am also passionate about finance hence I would like to invest in stocks in Nigeria. But that requires a lot of experience. I plan on undergoing a CFA exam soon. I will build skill and knowledge in that area. But I feel even with the wine, I’m still very much interested in investing in SME’s, God-willing.
Have you considered how the wine business will work with you having to fulfill the mandatory requirement of the National Youths Service Corps?
I am still young so I have the energy to do these things. This gives me the opportunity to see what works and what doesn’t. So as time goes by I can focus and zone in on particular business’. I don’t think NYSC will affect my business. Computers was an opportunity I saw. So far, I have won a bid to supply home offices with some computer. It came out of frustration in being a vendor for an oil servicing firm in Nigeria. I had been in involved in a lot of bids but with little success. So I decided to stop focusing on Nigeria and looked for opportunities in the UK. The means of doing business: paper work, transparency, communication, feedback. It is very clear, but it is hard work. You really have to do your homework, but yes I’ll go back to Nigeria.
Before we conclude, Nonso what tips do you have for the people who want to get involved in the wine importing business but lack the support financially to get started.?
Tips for the wine business I would say be ready for the long road. Research is important. Know your market segment and target group. Know regulation, NAFDAC. Sell on cash, It is also very important to have to try and get half the cash before you bring in products. In business generally I would say persistence and focus. Hard work, with a clear strategy, don’t wait till your 100 percent. One thing my mum told me was never wait until everything is just right. Start small, No matter where you are or how much you have.
I hope everyone out there reading this interview takes note! Nonso, thank you once again, for this interview. I appreciate, and will continue to look forward to the growth of Narada Trading Company and your other business ventures.
Amen. Thank you Gbemiga. My website is Narada Trading Company