Aderemi Ajidahun, CEO of Hole19 Group and Zakaa retail stores, is determined to change the way Nigerians purchase fine watches. The culture before he opened up his high-end Zakaa boutiques was for sellers to visit homes and businesses with suitcases full of watches, and customers could never be sure that the watches were new, original or even authentic. In 2010, Ajidahun opened up his first store, and three years later, he has five stores. I caught up with Ajidahun in his Hole19 offices in Abuja, Nigeria.
Europa Star: How’s business?
Aderemi Ajidahun: For a young company, things are doing well. We have had steady progress. Nigeria is a country where you have to do a lot of direct marketing. Our biggest competition is the briefcase seller of grey market goods who goes from office to office and home to home. High-end customers here in Nigeria do not want to come out to do shopping. We don’t have consistent luxury retail space here in Nigeria, so the briefcase seller does very well because he takes the goods directly to the buyer. I am determined to establish a brand and to have retail locations that can stand the test of time.
We’ve had to really build the brands we carry here in Nigeria. When we came in with Parmigiani, for example, people asked me if it was cheese. Our other businesses are all about building brands, so we adapted this to the watch industry. There is a lot of luxury consumption here in Nigeria, but there is no structured retail. With a population of over 170 million and vast oil wealth, Nigeria truly has its own fair share of Ultra High Net Worth Individuals and High Net Worth Individuals. Nigeria is reputed to be the fastest growing private jet market in the world. Better still, it’s a nation of natural born consumers of luxury, and everything else! I’m fighting every day to encourage the brands to think Nigeria!
How do you combat the briefcase sellers?
AA: The briefcase sellers are operating on very slim margins, they are working with retailers from other countries who give them the stock. We have to educate the market to be careful, to make sure you are buying the genuine product, to think about the guarantee, and we want them to go to the official retailer before they buy. If we can build a strong enough brand people will gravitate towards Zakaa. We have been quite aggressive. All our stores are in four or five star hotels, except for the flagship store in Abuja.
Why did you decide to open Zakaa?
AA: I have always loved timepieces and I went to Basel as a consumer, and I always took my wife with me. The third time I went, my wife was upset that I kept dragging her there. One night at dinner, she said that if I was going to continue going to Basel, I should make a business out of it. I was already in the golf business, which came out of my passion for golf, so it made sense. At the start, I wanted to distribute to existing retail outlets. My first brand was Edox, followed by Parmigiani, and I found that I was paying the brands but the retailers wanted me to give it to them on credit. I realised that these stores weren’t the right environments, so we had no choice but to create our own brand and our own retail.
How did you come up with the name Zakaa?
AA: Zakaa stands for Zhadie Alake Karale Aderemi Ajidahun, the full name of our youngest daughter, who’s five.
What is the secret of your success?
AA: We don’t cut corners, we don’t do things in half measures, and we try to do things as genuinely as possible. We have built up credibility here in Nigeria. We have good relationships with our brands, and the brands have really supported us. We have a great staff, which is exuberant and really motivated. We have a communications department that has thought out of the box, like producing our in-house magazine. We have a database of clients who have been customers for quite a while. We are in a consumer society that loves luxury products, and they find it tough to get these products in a luxury environment here in Nigeria.
What do you like about your job?
AA: I am having a ball. I love it and I know a lot about the market. Most enjoyable for me are the relationships. I like to work with brands with whom I can develop a friendship, which is difficult with the larger brands. I enjoy sitting and having dinner, discussing progress, showing them our country and our culture. They read many negative things about Nigeria and it’s always so wonderful when they come and see how great it is. The bottom line is not the first thing that comes into our minds; it’s about delivering the right environment and the right customer experience and service. We have opened four boutiques, and we recently opened a 400 square metre flagship boutique with a bar, tailor-made suits and shoes, all under one roof for the high net worth customer. It’s a great place for our customers to hang out. We want our customers to enjoy themselves.
What don’t you like?
AA: What I generally don’t like about the industry is that I have consistently tried to get all the people within the industry to work together. I’ve always said that the competition isn’t amongst ourselves; it’s between Nigeria and other countries. 80 per cent of all spending is done outside of Nigeria. We want to reduce this to 50 per cent. If everyone in the industry is bickering and sees the other retailers and brands as competition, it will lead to a lack of stability. We want Nigerians to spend that money in Nigeria, so we can build the infrastructure.
It’s high time the luxury brands start taking Nigeria seriously and stop using the lame excuse of being scared. They are well aware and happy to announce that Nigerians are some of their best customers in London, New York, Paris, Geneva, Dubai but yet, in general, they are reluctant to enter the domestic market. This only fuels capital flight, which is the real curse of Africa. True, there are challenges but this then requires working with knowledgeable, prudent partners like Zakaa with a different mindset. The first brands to truly arrive will definitely reap the rewards.
How do you market your store?
AA: As a young company, we have been focused on building the brand and the boutiques. It’s only now that we are going to do a TV ad. There are not enough luxury magazines, so we won’t be advertising in magazines that are not suitable (which is why we developed our own magazine in the first place). All brands find it difficult to get the word out. We do cocktails and dinners, inviting over 200 people. We are also doing a lot of work in social networks.
Who is your customer?
AA: Because we have such a varying range of products, our customer is the upwardly mobile, fashionable lady and gent. We have high-end timepieces, but we also have the fashion watch range. Our lower end watches are fashion watches, not cheap watches trying to look more expensive.
We have the business people, we have the corporate clients and the government. This is a big gifting society. We have a lot of gents who come in to buy gifts for their wives, their board of directors. We do a lot of customised pieces where we have to put logos or initials for specific companies. Our customer varies greatly.
Do you do repairs at your store? How do you handle repairs?
AA: We do basic repairs here (strap changes, battery changes, etc.) but we do not repair mechanical watches. We have to send them off now, but we will be sending two watchmakers off for training, so by the first quarter of 2014, we will have repair here.
How do you do training?
AA: We do our own training. We have a head of training and she will do basic customer service training, as well as display set up training and dress sense and professionalism. Product training we get from the brands, who come in quite regularly.
The more you know about your product and the history of the brand, the more you can offer that magical embodiment of the brand to the customer. You replicate your own passion and that is what gives value and personality. I am a big consumer of knowledge and I like everyone around me to do the same.
Are you optimistic about the future?
AA: I feel very good about where Zakaa is going. We have a very bright future despite our challenges within Nigeria. The country operates at an interest rate of 25 per cent a year. We are very thankful for our partners who have understood our situation. We want to improve in all areas, especially in staff product knowledge. We would like to add one or two critical brands, like Patek Philippe or Breitling, who are not in Nigeria. Rolex has one retailer here, but I think Nigeria can have more and we would also like to add Rolex. For every hundred Rolexes people are wearing here in Nigeria, the authorised retailer has only sold one. Nigeria is a country of 170 million people. Take even one per cent of that market as people who can buy luxury products, you are still talking about 1.7 million people.
What is your favourite watch?
AA: My current favourite watch is the JAYJAY10, a limited edition Parmigiani Pershing in rose gold, which we created, designed by the famous Nigerian footballer Jay-Jay Okocha, who always wore the number 10 jersey, in conjunction with the Parmigiani design team. Only 10 units were made and one unique piece is naturally owned by Mr. Okocha.
Facts and Figures
- Name: Zakaa
- Location: five stores (Abuja 2, Lagos, Port Harcourt, Uyo)
- How long: 2010
- Employees: 60
- Size of store: 28 – 400 square meters
- Average sale: $800 – 1200
- Range of price: $250 – $100,000
- Best selling brands: Louis Erard, Parmigiani and Ulysse Nardin
Source: Europa Star October – November 2013 Magazine Issue