BUSINESSES IGNORING INFORMAL MARKET REALITIES RISK LOSING OUT – LBS

The Lagos Business School has warned businesses that fail to understand Nigeria’s informal economy risk losing significant opportunities in one of the country’s largest markets.

The institution said companies need to recognise the realities of the informal sector and develop products, services, and strategies that reflect the needs and behaviour of informal businesses and consumers.

According to the school, the informal economy plays a major role in employment, trade, distribution, and household income across Nigeria, making it an important part of the broader economy.

Businesses that focus exclusively on the formal market could therefore miss opportunities to reach a large number of potential customers and partners operating outside traditional corporate structures.

Experts said companies should invest in market research and develop flexible approaches that take into account factors such as limited access to finance, digital adoption, payment preferences, and the operational challenges faced by informal businesses.

They also stressed the importance of building trust with informal operators rather than treating the sector as a temporary or secondary market.

The school urged businesses to explore partnerships, digital tools, financial services, and distribution models that can help them serve informal enterprises more effectively.

Analysts said greater engagement with the informal sector could also help businesses expand their customer base and create more inclusive growth opportunities.

LBS noted that understanding local market conditions would be critical for companies seeking sustainable growth in Nigeria’s changing economic environment.