Mr. Viatcheslav Kozloz, is the Chief Operating Officer of Tradex France, a French based company, which has just opened a subsidiary office in Dubai, about five months ago. Tradex France, being one of the reputable companies from Europe, participated at the recently held West Africa Auto Show and seeks to offer its services to the West African market, especially in Nigeria, hence, it is seeking partners and distributors for its products in the local market. Viatcheslav Kozloz had a chat on the sidelines of the WAAS (which held May 16-18, 2023), with Goodness Sunday.
Can you tell us about the history of Tradex France?
Tradex is a company which exist in the market for more than 20 years and specialized in spare part service and new car sales. So we have treaty cooperation with the brand such as Peugeot, Renault, Suzuki and also we are making trading with other brand such as Toyota and other brands. On the other hand, we are selling original spare parts of the same brand and we also have our own brand, Tradex which is a brand in aftermarket. We have our own oils, batteries and also the fast moving product such as shock absorber, brake pads, water pumps et-cetera. We have around 18 different products.
Can you give an overview of Tradex France decision to enter the Nigerian market?
Decision to enter the Nigerian market is going along with the strategy for the expansion. Five months ago, we started operation in Dubai and opened a subsidiary there, opened the offices in Deira which is located in Dubai. And also opened industrial zone in auto market region. We started operations with the new car and we are currently making the first step to sell the parts from Dubai office, but Tradex is already known in France, in Europe, North Africa, and already have the experience to sell spare parts in African country, Sub-Sahara.
So the decision to go to Nigeria to cover, to enter the most important country in sub – Sahara Africa in terms of potential, in terms of business dynamic and starting from Nigeria. We like to cover also countries like Ghana, Kenya, Angola, Mali, Ivory Coast, to Senegal, to Cameroon. So Nigeria is the most important. For us, it is very critical to come here and to show what we can do and the product that we can sell and to make a new contact which is to understand the country, to understand the culture, to understand also how the business is going here. To meet potential partners and then find the distributors.
The reason is to cover with expansion in the international stand of three main zone which is the CIS countries, soviet nation and GCC countries which is Gulf, all countries which is in the list and finally Africa. Already being strong in North Africa. Tradex now is willing to penetrate the market in the sub Sahara Africa So the reason to have this approach towards the market in the sub Sahara Africa, Nigeria. This is the reason for us to come to this exhibition and to show what we can do and find a partner.
What research analysis has been conducted to assess the potential of the Nigeria market for spare parts?
Before coming here, we looked at the car park and realized that the car parks is huge. Nigeria is one of the biggest in car parks of the sub Sahara Africa. We estimate between 14 or 16 million vehicles on the road and this creates big opportunity also for the aftermarket brand because the people cannot pay or purchase the original spare parts proposed by the car manufacturer, by the brands like TOYOTA, PEUGEOT, etc. but they are looking for a more economical solution. Assuming that of course the quality is good. So the car park is one of the trigger for us.
By Car park, it means the consumer needs to change oil every 5,000 kilometers. So in Nigeria, it is the average of 20,000 kilometers so we can say that the oil should be changed every year 4 times so we can apply the same times for the automobile parts. Change the oil we need to also change the filter. So again, looking for instance each rate should apply for each family of product and then the potential car park so this will give us the size of the potential market and then we need to say okay, which kind of park of this market we would like to take and even if we say that this huge market we estimated for several billions of euros and dollars, we take only 2 or 3%. The potential is big.
How does Tradex plan to position itself in the Nigerian market?
Tradex force is already a successful brand in Europe, France. The main market where we are located close to this market in Europe and also North Africa. We started in Algeria but we also selling the product, the Tradex product to other countries of North Africa. The brand is recognized by its quality and accessible price. So we will like to see if we will have a room here in Nigeria to duplicate this model to provide the quality which is comparable to the big spare parts manufacturers; with the oil like Total or Motul, Mobil. Then we have the same quality diesel very comparable and certified quality accepted in Europe. Then we propose a more accessible price for the local consumers.
We need to study the market in Nigeria to understand what are the key models and version of vehicle on the road and also provide the offers from our side to be able to respond as demands of the clients.
What criteria are you looking for from the distribution in Nigeria?
We have specialists in the automotive industry, we have expertise, we have expertise of the products, we have expertise of the global distribution, but we do not know Nigeria. We need to have a partner for the local knowledge. To know how to approach a customer here, what is the purchasing behaviour, what they want exactly. And this will be much more efficient if we go with the local distribution, who perfectly know the whole percentage of the culture, the customer service.
For me, the criteria are local knowledge, then of course experience in the spare parts distribution. I would say, which is also important, the size. Size in financial capacity to buy, to also organize storage facilities, to be able to provide the product immediately on demand because here in Nigeria the way people buy what is in stock.
What strategies or initiative will Tradex Force employ to attract and onboard distributors in the Nigerian market? Are there any specific marketing or promotional activities planned?
It’s to be able to promote Tradex as reliable brand and Tradex partners as trustable brand capable to supply the parts immediately and the strategy we are using, of course the promotion, it’s to provide the visual identity. It has a very appealing visual identity. A red color, red paint and white color, which is also very easy to memorize and recognize and then to have all these incentives that we can use with our partners. So we need to work with our partners, we need to identify the potentials, we need to identify the targets, to agree on the target, the plan of the supply. Of course if the targets are rich, perhaps additional bonuses for the partners to be stronger and be able to invest more.
So how does Tradex France plan to train or support its distributors in Nigeria?
Of course, when we establish the partnership with different partners, there will be exchange of different information. Organize also online training for the key person of the sales spot to teaching them about the product and sales technique. We can also imagine some potential training in Nigeria, and in the future we can organize a trip to France or Dubai for the best sales man. It’s for Nigeria but we can also make this challenge for all countries that cover the whole sub Sahara Africa.
And then the best sales man will go to maybe additional courses and training centers. We recommend to implement the IT system because to be able to manage the work house and give the good practices that we have in France and some other markets. How to manage stock, how to manage the purchasing process and delivery process from the procurement. So this is the main tools. Supporting the sales work, supporting the processes and also giving the guidelines for advertising, guidelines in this practices.
Do you see obstacles as you enter the Nigerian market? Do you see challenges?
Yes, we know we are discovering the market. We are at the very beginning of the knowledge, but what is seen here as threat is the variation of currency that may have some issues, some impact on the business activity because our main company is in France, even if you look at dollar there are some variation, even exchange rates can vary from months to months and sometimes it can make your product much more expensive, not because we changed something in our policy, but because of the exchange rates. So this can be challenging but despite this, I think for the time being, I feel very enthusiastic, I see more opportunity than the risks.
So how do you plan to overcome these challenges?
We need to monitor the foreign situation, to try to manage the corridor of the variation. To anticipate somehow that this variation can happen and we can benefit also from that exchange rates to suggest to our partners to stock more during the period and in terms of exchange rates. So this is how we can manage it. But today, we need to start and these are things we will manage and manage in the future
So far, have you been able to get a partner?
As at today, we have had several interesting discussions, and I hope one of them will come with a positive result.
So, what key performance indicator will Tradex France use to measure the success and effectiveness of its distributors effort in Nigeria?
At the beginning, we need to first start preparations. Keep your eyes open to make the first transaction and then to monitor those transactions, in order to develop those tug row, monitor the margin, monitor the impact of the forex foreign avenues. To be able to develop the business. To be present in the three big cities and be present in other states and we need to put an impact in Nigeria.