W26019

MITIMETH: A NIGERIAN SOCIAL ENTERPRISE GOES GLOBAL

Makarand Gulawani wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveypublishing.ca. Our goal is to publish materials of the highest quality; submit any errata to [email protected] i1v2e5y5pubs Copyright © 2022, Ivey Business School Foundation Version: 2022-08-12

In January 2022, as the world grappled with the COVID-19 pandemic, Achenyo Idachaba-Obaro was in

Ibadan, Nigeria, busy preparing an international marketing strategy for MitiMeth. MitiMeth was an

innovative social enterprise founded by Idachaba-Obaro, which produced handcrafted products made from

natural fibres—agricultural waste and aquatic weeds—that were otherwise considered to be waste or an

environmental hazard. MitiMeth added value to this material by transforming it into well-designed furniture

and home furnishings, storage boxes, lamps, kitchen and dinner ware, stationery, and souvenir items.

Idachaba-Obaro’s initiative of transforming this environmental nuisance into marketable products provided

work for more than 600 people from over twenty-five communities in Nigeria. Despite challenges in

exporting from Nigeria, MitiMeth had made good progress in reaching international markets.

MitiMeth had already gone through several challenges, and the pandemic only added to the difficulties the

enterprise had experienced. Idachaba-Obaro needed a plan that ensured MitiMeth’s long-term sustainability.

THE FOUNDER

Idachaba-Obaro was born in the United States (US) to Nigerian parents and had a bicultural experience living

and attending school in both the US and Nigeria, before going on to study computer science at university. As

a young adult, she had always wanted to contribute to Nigeria’s economic development. (Exhibit 1).

NIGERIA

In 2015, with 180 million people, Nigeria was the most populous country in Africa. Despite the wealth generated

by the booming oil sector, most of the Nigerian population (62 per cent) lived below the poverty line. This

problem stemmed from the informal and low-paying jobs that dominated the job sector. The lack of good, well-

paying jobs was reflected by the levels of unemployment and underemployment in the country. To make matters

worse, 2 million new workers entered the labour force each year. Young people were greatly affected by the

lack of jobs, with almost half of Nigerians aged 15–24 being either unemployed or underemployed, fuelling

crime and social unrest. This social unrest greatly affected children‘s education. Nigeria had an enrolment of

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only 60 per cent of boys and 55 per cent of girls in elementary school. Most children did not attend school out

of fear of violence and recruitment by groups such as the terrorist group Boko Haram.1

THE SOCIAL ENTERPRISE

Idachaba-Obaro founded MitiMeth, a social enterprise, in 2011. Her objective was to reduce the water

hyacinth problem in Nigeria. According to Idachaba-Obaro, water hyacinth clogged rivers, depleted the water

of vital nutrients, and led to significant reductions in fish populations. Idachaba-Obaro learned that different

communities in East Africa and Southeast Asia had successfully harvested these weeds and weaved them into

marketable products, and thought that she could do the same in Nigeria. Idachaba-Obaro spent time in

different communities in the region learning first-hand how to harvest, dry, and weave the weeds herself.

While in Ibadan, Idachaba-Obaro befriended a couple of artisans and together they made their first products.

With her new-found skills, Idachaba-Obaro established relationships with different private and public sector

organizations across the country to train communities of unemployed women and young people to turn the

weeds into functional and decorative products. MitiMeth was involved in training over 600 workers in

twenty-five communities in Nigeria and Ghana. Through MitiMeth, Idachaba-Obaro continued teaching a

growing number of communities how to make water hyacinth products, giving them lifelong skills that

were useful for earning a livelihood. Idachaba-Obaro’s vision was for MitiMeth to become a top provider

for handmade products (see Exhibit 2).

MitiMeth produced handcrafted products from a variety of natural fibres that were otherwise considered to

be waste or an environmental nuisance—including aquatic weeds and agricultural waste such as banana

trees and bamboo. MitiMeth produced well-designed furniture and home furnishings, storage pieces, lamps,

kitchen and dinner ware, stationery, and souvenir items (see Exhibit 3). With its business activities,

MitiMeth made a notable impact on Nigeria and the surrounding countries by taking a waste product and

using it to create an eco-friendly and profitable business. By harvesting the aquatic weeds from rivers,

barriers to river travel were also reduced, resulting in greater comfort for river-travelling Nigerians.

Additionally, their removal helped increase the populations of river fish. The social enterprise positively

impacted local communities by creating job opportunities for women and young people. The jobs created

by MitiMeth were low risk, and anyone who wanted work was able to join the company.2

After establishing the production process, MitiMeth started marketing its products. Idachaba-Obaro knew

that the Nigerian market, with its penchant for imported over locally made goods, was limited. With the

global market for handicraft products reaching at US$ 680.10 billion3 in 2021, MitiMeth would need to go

beyond selling its products in Nigeria.4 Idachaba-Obaro knew that the US and Canada were profitable

markets for handmade products and that there was a greater appreciation and demand for such goods.

1 Ionel Zamfir, “At a Glance, Nigeria: Social Situation,“ European Parliamentary Research Service, February 2016, http://www.europarl.europa.eu/RegData/etudes/ATAG/2016/573954/EPRS_ATA(2016)573954_EN.pdf. 2 “Laureate 2014: Sub-Saharan Africa, Achenyo Idachaba-Obaro,“ Cartier Women’s Initiative, accessed May 23, 2022, https://www.cartierwomensinitiative.com/node/195. 3 All dollar amounts are in USD unless otherwise specified. 4 IMARC Group, “Handicrafts Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2022-2027,” accessed June 12, 2022, https://www.imarcgroup.com/handicrafts-market.

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GOING GLOBAL

In 2011, while reaching out to various retailers worldwide, Idachaba-Obaro learned about the World Fair

Trade Organization (WFTO) (see Exhibit 4) and how some stores only sold fair-trade items. She knew how

certain retail stores emphasized fair trade in their practices and realized that becoming a certified fair-trade

organization would be helpful to MitiMeth.

In 2016, through the Kenyan social enterprise Kisumu Innovation Centre, MitiMeth was connected to the

WFTO’s regional director for Africa. Through the WFTO, MitiMeth successfully applied to attend the Fair

Friends in Germany as a provisional member, and received an invitation to participate in Germany’s

Corporation for International Cooperation GmbH (GIZ) ’s delegation as well as the trade fair in Germany.

It was a big opportunity for MitiMeth. At GIZ, Idachaba-Obaro was able to network with and learn from

numerous social enterprises from across the world that were already exporting products. Fair Friends

offered MitiMeth a glimpse into how international markets differed from domestic ones. Additionally,

Idachaba-Obaro developed a better understanding of exporting and using the proper channels for export.

The next step for Idachaba-Obaro was to plan for entering the international market. She knew that to

motivate international customers she needed to share the stories of transformation, hope, culture, and the

development behind MitiMeth’s products. She already knew that certain North American stores only sold

products made by fair-trade members and that fair-trade practices and products were important to some

consumers. Hence, she prioritized MitiMeth becoming a fair-trade certified organization in order to open

new doors for her social enterprise. MitiMeth was granted provisional membership of the WFTO and began

to build its presence in the market for handmade, eco-friendly products. However, unlike her counterpart

social enterprises in Kenya, MitiMeth was the only provisional WFTO member in Nigeria and the cost

burden for fair-trade certification of just one Nigerian enterprise was significant. With no other Nigeria-

based enterprise interested in going through the process to help share the cost burden, MitiMeth had to put

the process for full WFTO membership on hold.

Before MitiMeth could even plan to sell its products internationally, the organization had to consider the

various applicable tariffs, which differed from country to country. Tariff information was easy to find. Most

countries had information available online, and MitiMeth products even qualified for duty-free shipment in

several countries. However, the real challenge started when MitiMeth began to look into how to ship its

products. MitiMeth soon found that exporting from Nigeria was difficult, since the country lacked the

enabling systems and infrastructure to make exporting easy and straightforward for small businesses like

MitiMeth. Marketing products internationally was not an easy task for a small social enterprise in Nigeria.

Information and support on exporting from Nigeria were not readily available. There were several

additional challenges in the country, such as a lack of adequate infrastructure, an absence of skilled human

resources, corruption, etc. There was yet another difficulty at the export terminal: Nigeria did not have

appropriate storage and logistics facilities at airports.5

THE CHALLENGE

There was another challenge when it came to promoting MitiMeth’s products internationally. During her

participation at the trade fair in Germany, Idachaba-Obaro realized that many other social enterprises had

previously participated in export programs, which had helped them to become export-ready through export-

5 “Nigeria’s Cargo Airports⎯A Tale of Broken Dreams,“ Business Day, April 1, 2018, https://businessday.ng/exclusives/article/nigerias-cargo-airports-tale-broken-dreams/.

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focused product design and development and had paid for their participation at exhibitions and trade fairs.

Unfortunately, Nigeria was not one of the countries for which assistance was available through most of

these programs, putting MitiMeth at a disadvantage. MitiMeth needed hand holding and assistance with

market development in order to successfully enter the export market. Large companies spent millions of

dollars on marketing alone. MitiMeth did not have a large budget to run multiple advertisements in different

countries and languages. In other words, MitiMeth was at a significant disadvantage: how could the

organization win customers if no one knew about them?

MitiMeth needed access to markets outside of Nigeria, particularly in Europe and North America. As the

COVID-19 pandemic kept spreading during 2020 and 2021, Idachaba-Obaro spent a lot of time and energy

on marketing MitiMeth’s products. She realized that MitiMeth had a chance to enter global markets through

her experience of various international conferences and meetings. In 2018, MitiMeth signed up for the

International Trade Centre’s SheTrades Commonwealth program (SheTrades) designed to facilitate

participation of women-owned businesses in international trade and increase job creation in Commonwealth

countries. In 2020, MitiMeth participated in several ‘Pivoting to Digital’ sessions organized by SheTrades,

designed to help businesses explore trade through digital platforms. With lockdowns being enforced and

most people sheltering in place, the demand for home goods began to experience increased growth. This

was a welcome development, and MitiMeth was subsequently selected by SheTrades to participate in the

first Digital NY NOW show, which took place in October 2020. As demand for more sustainable and ethical

products kept increasing worldwide, Idachaba-Obaro thought she could use MitiMeth’s status as an eco-

friendly and livelihoods-enabling organization to leverage it into the market to fulfill the demand for such

household products. Additionally, Idachaba-Obaro identified that MitiMeth could sustain its business if it

could meet demand fuelled by long-term business-to-business customers in the US and Canada.

REVENUE

Fortunately, Idachaba-Obaro’s expertise in computer science helped her create an online presence. She used

her computer skills to develop an informative and user-friendly website for MitiMeth, including the

organization’s story, informative blogs, and an online shop. She also made MitiMeth products available

through Etsy, Inc., an online marketplace for handcrafted products. The sales revenue from corporate

consumers and local retailing had shown a very positive trend year over year. The majority of MithMeth’s

sales came from sales direct to consumers. The bestselling product was dinnerware (a set of placemats and

coasters), that retailed for around $37, and was available for purchase online along with several other

products. MitiMeth also offered made-to-order products.

MitiMeth had a small team that looked after online sales from its headquarters in Ibadan, Nigeria. For

MitiMeth, the most challenging revenue source was e-commerce. Idachaba-Obaro realized that

international customers, particularly those in North America, were reluctant to purchase MitiMeth’s

products online because of the unavailability of samples and not having a local contact to resolve any after-

sale issues that arose. Idachaba-Obaro, from her experience, knew that most of customers purchased

products they were able to see, touch, and try. MitiMeth did not have enough resources to have a local

contact or distributors in the US, Canada, or Europe.

THE FUTURE

Idachaba-Obaro wanted to considerably increase MitiMeth’s revenue in order to better support its members by

increasing their income. During the pandemic, Idachaba-Obaro realized that she needed to pay more attention

to steadily increasing sales. In late 2020, MitiMeth started communicating with its international friends, partners,

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and customers in Europe and North America, informing them of the products available for online purchase (see

Exhibit 5). As a result, MitiMeth received several online orders from individuals and retail stores.

By 2021, MitiMeth had received several orders from the US, Sweden, Germany, Spain, and France. The

most significant business-to-business order was from the US, from a business consumer who placed the

order through the MitiMeth website. This online order highlighted additional challenges posed by the cyber

security firewalls preventing e-commerce transactions from being processed without human intervention,

especially for e-commerce platforms based in Nigeria. The US customer had to call MitiMeth’s bank on

several occasions before the transaction could be processed. Not all customers had that kind of patience,

especially when there were easier alternatives to be found elsewhere. Unfortunately, while that particular

order was a large one, it was also a one-time order for a Nigerian-made gift basket.

Another export order arrived following word-of-mouth publicity. A visitor from Germany called into the

MitiMeth store in Lagos and, after returning home, provided information about MitiMeth to a business

customer, who placed an order. MitiMeth also had a presence on the Trade+Impact Associaton’s website,

a global trade association and social impact platform to advocate and advance women-led social enterprises

in Africa and the Middle East. A Spanish business found MitiMeth’s information on the Trade+Impact

website and contacted MitiMeth with the intention of co-creating and producing designs for its new

boutiques opening in Europe.

To increase production capacity, MitiMeth began looking for a machine with which to make rope from

water hyacinth. Idachaba-Obaro contacted a manufacturer in Sweden that designed rope-making machines

for community enterprises working with natural fibres. This relationship progressed well, resulting in an

order being placed for MitiMeth products.

In terms of international sales, 2021 was a successful year for MitiMeth. However, it was not without

challenges. The significant difficulty MitiMeth had was in receiving online payments. Financial institutions

consistently declined online payments. European and North American banks were cautious about Nigerian

companies receiving money. Hence, for a seamless shopping experience for MitiMeth’s international

customers, Idachaba-Obaro decided to use third-party marketplace platforms for online payments. Another

challenge was the high shipping costs from Nigeria to Europe and the US. Smaller orders did not make a

sufficient profit, and the cost of shipping them was greater than the cost of the product itself.

Additionally, there was another reason for MitiMeth’s shrinking profits. MitiMeth was in the process of

applying for the Nest Seal from the Nest Artisan Guild, which required compliance with several worker-

related policies. As a result, MitiMeth had high production costs because of the fair wages paid to its

artisans. Despite increased international orders, MitiMeth’s profits did not increase. However, MitiMeth

did get some benefit from the depreciated value of the Nigerian naira.

Another considerable challenge was the availability of products from suppliers in India, Thailand, and

Vietnam, countries which had decades of experience in making products from water hyacinth and other

natural fibres. Their expertise challenged MitiMeth to make different and unique products that did not

compete directly on style or cost.

The export market potential was significant for MitiMeth. However, it was also challenging in its

complexity and level of competition. Hence, Idachaba-Obaro’s team was continuously open to working

with organizations to help develop new products and create new collections. At the end of 2021, MitiMeth

was selected by the co/rizom association to receive support for the development of a collection to be

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showcased at an international exhibition. In 2022, MitiMeth’s product development team worked with a

co/rizom designer to create a new home collection to be launched at one of the European design weeks.

For Idachaba-Obaro, 2021 was a trial year to determine the results of her marketing strategy. Based on her

findings, she began to adjust that strategy. Idachaba-Obaro realized that she needed greater capacity building

to push MitiMeth products into international markets and avoid an uphill battle for the organization. Idachaba-

Obaro’s decision to enter the Nest Seal process was a step in that direction. She was confident that this was

crucial to attracting high-end lifestyle customers from Europe and North America. She also realized that

becoming a supplier for home decorat