TradeDepot, a Nigerian startup addressing supply chain inefficiencies in the informal retail market, is extending its offerings to financial services.
With a retail market valued at $105 billion, Nigeria’s informal vendors—comprising mom-and-pop shops, street traders, and open-air markets—dominate with 98% of sales, as noted by Deloitte. These small-scale retailers are critical to consumer goods distribution but face challenges due to a fragmented market of 1.2 million sellers. Middlemen and logistical hurdles add complexity, driving up costs for end consumers.
Founded in 2016 by Michael Ukpong, Onyekachi Izukanne, and Ruke Awaritefe, TradeDepot connects manufacturers with informal retailers, focusing on fast-moving consumer goods (FMCG). By leveraging technology, the platform simplifies inventory management, processes orders, and facilitates payments through mobile apps, USSD, WhatsApp, and toll-free calls. Currently, it serves over 40,000 retailers across Nigeria.
The Vision Behind TradeDepot
TradeDepot’s CEO, Onyekachi Izukanne, revealed that the idea emerged from years of consulting experience in the FMCG sector, implementing enterprise resource planning (ERP) systems for brands like Coca-Cola, Cadbury, and Nestlé. While designing solutions for supply chains was straightforward, addressing demand-side challenges in Nigeria’s fragmented retail market required tailored approaches.
After years of tackling these challenges for clients, the co-founders developed a platform allowing manufacturers to distribute goods directly to informal retailers efficiently. Since its launch, TradeDepot has seen significant growth, with sales tripling in the past year.
Evolving with Financial Services
TradeDepot plans to expand into financial services by offering credit to retailers, addressing the capital constraints that limit their potential. Most informal vendors lack access to loans due to inadequate financial documentation, restricting their ability to scale.
By digitizing transactions through its platform, TradeDepot aggregates valuable business data to assess creditworthiness. Providing working capital will enable retailers to stock more inventory, unlock discounts, and enhance efficiency. This initiative has particular social implications, as Nigeria’s informal sector is predominantly driven by women, who often face barriers to financial resources.
Support for Women Entrepreneurs
Through partnerships like the Women Entrepreneurs Finance Initiative (We-Fi), TradeDepot is working to empower women in retail. We-Fi’s Program Manager, Hanh Nam Nguyen, highlighted that offering capital and market linkages can help women-led businesses thrive, fostering broader economic growth within communities.
Funding and Growth
TradeDepot has raised $13 million since its inception, including $10 million in its latest funding round, backed by investors like Partech, IFC, and MSA Capital. These funds will support its expansion into financial services and enhance its infrastructure to streamline retail operations further.
Competition and Market Outlook
Unlike logistics platforms such as Kobo360 and Lori Systems that focus on long-haul cargo transportation, TradeDepot is unique in connecting manufacturers directly to small-scale retailers. It manages warehouses and delivery fleets while outsourcing logistics to third-party operators when needed.
The potential for growth in Nigeria’s informal retail market remains significant. Despite challenges like low purchasing power and economic volatility, essential goods continue to drive substantial sales. By bridging gaps in the supply chain and addressing financial barriers, TradeDepot is poised to play a pivotal role in transforming the retail landscape in Nigeria.
