General Discussion
Join Us as we deliberate on the Abuja Chinese Shopping Mall business situation
The Abuja Chinese shopping mall faces a complex business challenge as it opts to conduct transactions using the Chinese yuan instead of the Nigerian Naira and restricts access to Nigerians. This shift away from the local currency and the exclusion of the local population presents a deviation from standard business practices in the region. Understanding the reasons behind these strategic choices is essential for evaluating the impact on the mall's operations, customer base, and overall business performance.
Below are our experts' opinions on the mall's decision:
1. Depreciation of the Naira: The Naira's depreciation against other major currencies, including the Chinese yuan, may lead businesses to prefer a more stable currency like the yuan for transactions. This can help protect against the fluctuating value of the Naira and preserve profit margins.
2. Currency Stability: Chinese businesses operating in Nigeria may prefer to conduct transactions in yuan due to its stability and ease of repatriating profits back to China without losing value due to currency fluctuations.
3. Trade Relationships: Strong trade relationships between China and Nigeria might encourage the use of the Chinese yuan as a means of exchange, particularly in Chinese-owned businesses in Nigeria.
4. Regulatory or Tax Advantages: There may be regulatory or tax advantages to conducting business in yuan rather than Naira, providing an incentive for the mall to operate in this manner.
5. Target Audience: The mall might be targeting a specific demographic, such as expatriates or Chinese nationals, who are more comfortable using yuan. This strategy could also be part of a broader focus on catering to a niche market segment.
6. Access Control: The restriction of access to Nigerians may be aimed at maintaining exclusivity, controlling customer demographics, or ensuring that customers using the mall are prepared to engage in transactions using yuan.
WHAT IS YOUR TAKE?