Entrepreneurship Zone: 29 April 2024 :: This NBA agent moved back to Nigeria to build a sportswear brand

Mon Apr 29 08:06:23 CAT 2024

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Entrepreneurship Zone: 29 April  2024 :: This NBA agent moved back to Nigeria to build a sportswear brand

Ugo Udezue, founder of AFA Sports

After a career in the US as an agent for some of the top NBA players, Ugo Udezue moved back to Nigeria to eventually start sports and athleisure wear company AFA Sports, short for ‘Africa for Africans’. He talks to James Torvaney about market dynamics in the local sportswear industry, the company’s marketing and sponsorship strategy, and why it was essential to get a footing in Nigeria before expanding overseas.

You initially moved back to Nigeria to start a basketball league. How did that come about?

I’ve always been passionate about sports, especially basketball. I moved from Nigeria to the United States in 1996 on a basketball scholarship, and played college basketball as well as for the Nigerian national team. I worked for around 17 years at BDA Sports Management, acting as an agent for some of the top NBA players.

I moved back to Nigeria in 2016, wanting to build some kind of legacy. I had the vision of starting an Africa-wide basketball league (Udezue founded, and still runs, the Continental Basketball League, with participating teams from Nigeria, Gabon, Equatorial Guinea, Côte d’Ivoire, Benin and Togo). I didn’t know anything about apparel manufacturing at that point.

So when did you decide to go into sportswear and create AFA Sports?

I tried to get apparel sponsorship for the league, but nobody wanted to hear me out – they told me they didn’t see Africa as a viable market. We needed a brand that’s local, to invigorate the local sports pipeline, so I thought, “Why don’t we just start our own brand?”

So AFA Sports started with ‘humid-resistant’ basketballs. When we started the basketball league we noticed that there were a lot of turnovers (players losing the ball to the opposition before having a chance to shoot). The balls were too slippery because they were designed for air-conditioned gyms, not for the hot, humid environments in Africa. I went to China, and designed and manufactured humid-resistant basketballs that could absorb sweat. Immediately we witnessed fewer turnovers as a result of the new balls.

The next thing we looked at was shoes. A lot of African basketball players are flat-footed, and traditional basketball shoes don’t work well for them. So we designed something for flat-footed athletes, and everybody loved them. Then we just kept building the AFA Sports brand from there.

We were pretty naïve at the time. We didn’t know anything about design, warehousing or supply chains; we just started researching online. It was completely organic. If I’d known then how much work it was going to be, and how many friends and opportunities I would lose, I might have been too scared to jump off the cliff!

How would you describe the AFA Sports brand?

Our goal is to build a brand that elicits a feel good response – to people inside and outside Nigeria. I want people to see our logo, our brand, and think, “I want to be a part of that”. That’s why our slogan is “this is ours!”

The brand itself is young and vibrant, but we try to appeal to people across the market. Our target market is very diverse – from ages 18 to 40. We want to offer products for everyone, from everyday basics right up to the high-end of the market.

AFA Sports manufactures a wide range of apparel.

Do you think there is a viable high-end sports and athleisure wear market in Nigeria?

The reason you don’t see a lot of international brands in Africa is that there are misconceptions about the target market, and the number of people that can afford these kinds of products, as well as the huge second-hand clothing market.

There’s a general lack of data – if you depend on the official information you would think there is no potential market. But the whole of Africa is underserved. A lot of sports brands rely on their Dubai outlets to serve the whole of Africa. The Nigerian market in particular is an anomaly – if you are here, you can see how much champagne is consumed, how many people use iPhones. There are untapped opportunities.

What is your retail and distribution strategy? How important are online channels to AFA Sports?

Currently we have dedicated AFA Sports stores in Lagos – Lekki and FESTAC Town – and Abuja. We also retail in Spar supermarkets across the country, and are investing in further stores, including in Ikeja and Surulere.

About 40% of our sales come from online – via our website, social media, etc. Ideally we want to get this to 80%. For us digital is the way to go. We live in a society now where customers expect to order and get things immediately. How many people want to sit in traffic in Lagos just to go to a store and buy a piece of clothing?

So we’ve been working with some digital marketers, working on our supply chain so that customers can order off the website and have their clothes delivered in Lagos the same day, or latest the next day.

I think in the next three to four years we are going to see the online commerce space explode in Nigeria.

But it’s not just Nigeria, right? You also sell internationally?

We ship to around 10 countries. We are working with fulfilment centres in Europe and the United States to reach more customers.

There is a huge diaspora opportunity. Something like two out of every five black people in the United States are Nigerian, or have Nigerian descent. It’s not only a huge demographic, but it’s also very economically powerful.

But we are not limiting ourselves to just the Nigerian diaspora. Anybody who is Africa-conscious, who understands the African heritage, is a potential customer. Right now, Nigeria is driving cultural changes across the entire black community. We want to be part of this African renaissance that is happening around the world right now.

How different is it operating in the US compared to Nigeria?

It’s a total mindset shift, a whole different perspective. In Nigeria, we are the market leader, the most visible brand, and can set the trends ourselves. In the United States, we cannot compete with the biggest players. We have identified our niche, and we stick to that.

Do you think it was necessary to build up a following in Nigeria first before you went internationally?

Definitely! Authenticity is key – coming from Africa, being African. If you look at music, it’s the homegrown artists like Burna Boy that are doing well, and selling out massive arenas.

If we had started in the United States and expanded into Africa, we wouldn’t have had that authenticity. We would just be another brand. We wanted to get a stronghold in the Nigerian market first.

A year ago, I couldn’t have afforded to leave the Nigerian processes on auto-run, but now they are in place and the Nigerian operation is a well-oiled machine. We feel that now is the right time to move beyond the continent.

An AFA Sports outlet.

AFA Sports sponsored the Nigerian men and women basketball teams, as well as being the official outfitters for the Nigerian Olympic team at the Tokyo Games in 2021. How do these sponsorships tie into your growth strategy?

Like I mentioned, it’s really important for us to be authentic, and one of our core objectives is to be a big part of the African grassroots sports scene. So we sponsor local teams and events. We want to take over the sports industry in Africa, to be everywhere – not just basketball, but football, cricket, and other sports.

Being the first African brand to kit out an Olympic team was an important step, but I don’t think we have even tapped into 1% of the overall sponsorship opportunities.

What are some of the trends you have seen in the sportswear industry in Nigeria, and in Africa more generally?

The sportswear market is actually still relatively small – athleisure wear is our biggest market. It’s a big growth market in Africa. We have our own line we call Afrileisure – it’s our take on traditional African clothing that is more breathable, easier to maintain, and that you can take to the gym.

Globally, business is becoming more casual. Even in Nigeria. The brand really got big during the Covid lockdown, when people were not having to go to the office. Before lockdown, nobody thought it was a good idea to produce clothing locally.

Another thing that’s different about the Nigeria markets is that most of our customers are men, even if they are buying the clothes for females. This is different to developed markets where women spend more on clothing. The women’s clothing market is quite confusing in Nigeria – we still don’t understand it fully.

Where are your products made?

Everything we sell, we design and produce in Nigeria. We have different factories, and it’s a mix of mechanised production and by-hand. I’d never done manufacturing before starting AFA Sports – it took a team of six people about six months of experimentation to understand how the manufacturing would work.

At one point we had over 30 full-time staff and 500 tailors. Now we are much more leaner and effective – we have around 10 staff, and have outsourced a lot of operations.

Highlight some of the biggest challenges you have faced.

Human resources. Finding the right people, and establishing the right chemistry, is tough. Especially when you are a start-up, and you lack the professional structures or comfortable life of the big companies. People usually prefer to go into the oil and gas industry, or to multinationals or banks. Start-ups are a lot of hard work, and it can be really hard to get people to see your vision.

How is AFA Sports funded? Have you raised money from external investors?

All our funding is internal. We have received opportunities but are being meticulous about who we work with. We are not just looking for funding, but we are looking for partners that can help us expand globally. We can be sustainable without funding but hoping to raise soon, and that will allow us to grow quicker.

What are your plans for the future?

Our vision is bigger than just selling clothes and shoes. Our vision is projecting a different image about Nigeria, and Africa. We want to be the biggest sports brand in Africa.

I see exponential expansion over the next few years. We have grown quite carefully up until now. We have never run any television or billboard advertisements. Everything has been word-of-mouth. I was worried about whether our supply chain could cope. The next 10 years are going to be huge. We have only scratched the surface.

Howwemadeitinafrica

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