Entrepreneurship Zone: 22 May 2020: A Nigerian toy empire built from the ground up

[Bulls n Bears]

The four-storey Auldon Toys building in one of the busiest markets in Nigeria’s commercial capital, Lagos, is testament to a lifetime of growing a successful business based on the simple principle of supply and demand.

The company evolved from small beginnings. CEO Paul Orajiaka started his toy empire in the same market when he was just 18, buying stock from a local trader and selling it on to supermarket chain Park ‘n’ Shop for a tidy profit.

What began as a “side hustle” from his day job eventually became his full-time occupation and, in time, a thriving company.

Starting out

Orajiaka’s business journey started in the shopping mainstay of most Nigerians – the country’s crowded and highly entrepreneurial markets.

“I am passionate about toys because I didn’t grow up with them. My dad had a strict worldview of work over play, so he brought us up working in his craft shop to learn how to make wood carvings rather than letting us play with mates,” he says.

“All my friends had bicycles that their parents bought for them. But my dad wouldn’t buy for me or my siblings. So, I saved up money from the craftworks I was producing in his shop and bought my own. I was the envy of the kids because I chose my own bicycle and didn’t have to just accept a parent’s choice. It felt like driving a Lexus while others rode a VW Beetle.”

He had an opportunity to study in the US after leaving school but was refused a visa, and therefore decided to join his brother-in-law’s merchandise import business in Lagos.

But his entrepreneurial streak led him down another path. He soon began a sideline business after securing a deal with Park ‘n’ Shop to supply toys to their supermarkets. He noticed Park ‘n’ Shop’s toy selection was rather thin, and offered to source new stock for them.

He sourced his stock from a shop in the bustling streets of Idumota market on Lagos Island. With banks too risk averse to provide early-stage funding, he turned to family for resources and his brother-in-law stood as guarantor for the first order.

Taking it to the next level

But as demand grew and Park ‘n’ Shop expanded beyond Lagos, Orajiaka needed a model that would enable him to put down roots and source his own stock. He quit his regular job and set up his own business, Arigold Toys. He rented a shop in the market from where he could supply a growing number of customers.

Orajiaka’s first invoice

“I wanted to be a (naira) millionaire by the time I was 21. I beat my own target,” he says. Cutting out the middleman was a big step in this journey. “I rolled up my sleeves and became a real market boy. I was making good money with two income streams by then – one being market traders and the other the supermarkets.”

Orajiaka, then just 19 years old, later flew to Dubai to establish his own direct relationships with suppliers to enable him to cut out local traders. He also printed flyers for his Lagos business and travelled to the big markets in Abuja, Port Harcourt, Aba and other cities to punt his new business.

 



Auldon Toys CEO Paul Orajiaka (standing)

The initiative paid off – in a short time his store was patronised by traders from around Nigeria, also wanting to sell toys but who had no idea where to start. In time, he ended up being a supplier to the same traders who had provided his stock in the early days.

He soon outgrew the small market shop and built a multiple-storey plaza to accommodate his growing business and create a comfortable space where he could properly display his wares. “We were getting in four containers a month and we needed somewhere to keep the stock.”

The range of toys kept growing, ranging from rattles and soft toys to high-end cars and trucks, robots, musical instruments and even drones. Educational products such as Lego, board games and puzzles, toy computers and learning aids are the company’s best-selling stock, with parents wanting more than just entertainment for their children.

In 2002, the company was renamed Auldon Toys, a combination of his own name and his love of the dons in mafia movies. “Think of me as Paul the don,” he says.

Unity Girl dolls – a game-changer

However, despite the success of the business, some key doors remained closed to him. Among them were new entrants into the Nigerian retail market – South African chain stores Shoprite and Game, anchor tenants in a growing number of modern shopping malls.

“They brought in toys that Nigerian kids couldn’t relate to. We told them we know this business better than them, but it didn’t make a difference.”

Until he introduced the Unity Girl dolls. “Then they came knocking on my door,” he says, buying not just the dolls but a wide range of other toys.

The uniqueness of the Nigerian-inspired dolls, complete with locally made clothes and accessory kits, has helped to boost the business and kick-start international expansion. It has also attracted media attention in a way that years of selling imported goods did not do.

Auldon’s Unity Girl dolls

You need one big idea to take your business to the next level; to get you into the spotlight and set you above your competitors, says Orajiaka. The culturally relevant dolls were his game-changer.

The dolls, rolled out in 2015, reflect different regions of Nigeria. They are kitted out in Nigerian attire and have Nigerian names. Local children, including his own daughters, are portrayed on the packaging, giving the product real authenticity.

The range has since been expanded to include “career” dolls with accessories to dress them as pilots, doctors, engineers and chefs, among others. “I wanted young girls to stop chasing the princess dream. I want our dolls to show them they can be whatever they want to be.”

The expense of manufacturing in Nigeria made it cost effective to bring the dolls from China. But every other component is locally made. Teams of people have been trained to produce the clothes and accessories.

“We not only created a relevant, value-added product, we also created employment. There is a strong social component in this product that now drives the business model.”

The dolls, while not the best sellers, have opened doors beyond Nigeria. The Walmart-owned Game stores in South Africa now stock them and there are plans to expand further into the southern region.

Auldon Toys has also secured a contract with international airport retailer Dufry, which currently sells the dolls at Lagos and Abuja international airports with prospects to expand it to other African airports.

Manufacturing in Nigeria

Despite the challenges of manufacturing in Nigeria, Orajaika plans to start adding more value locally, starting with the local assembly of toy kits. In 2019, a memorandum of understanding was signed with one of Europe’s biggest toy manufacturers, Polesie, to market their products in Nigeria and to partner them in the manufacturing venture with an eye on the regional market.

But, says Orajiaka, being an entrepreneur in Nigeria is tough. “You are on your own. The government says they are supporting SMEs but they just pay lip service to this idea. It is the same with the banks. They say they want to support small business, but they are always looking for the big transactions.”

“The costs of operating are high. We have to be our own local governments, providing lights, water and fixing our own roads.”

“There are sharks all around,” he says, citing constant harassment by the local authorities who can shut up your shop or warehouse while they demand payment of bloated local dues. Delivery vehicles can be impounded on spurious charges. The levels of policy uncertainty are high, making planning difficult.

“You need a very flexible business model. If you can succeed in Nigeria, you can succeed anywhere.”-Howwemadeitinafrica

Invest Wisely!

Bulls n Bears 

 

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