[Detailed] The 11 Types of markets in Nigeria
I am going to discuss the types of markets that are available in Nigeria. This list will be focused on markets that you will find in Nigeria and I will do my best to explain them as much as possible.
What is a market?
Any place where sellers of particular goods or services can meet consumers of the same products or services is referred to as a market. It establishes the likelihood that a transaction will occur. The buyers must have something to give in exchange for the commodity in order for the transaction to succeed
Marketing refers to the actions performed by a business to draw customers to its products or services through compelling messaging. Marketing aims to produce stand-alone value through content for prospects and consumers with the long-term objectives of demonstrating product value, fostering brand loyalty, and ultimately increasing sales.
The trade of products and services can take place in a market, which is a gathering place for interested parties. Buyers and sellers are typically the parties engaged. The market might be actual, like a physical store where people interact in person, or it could be virtual, like an online market, where there is no face-to-face interaction between buyers and sellers. A market is characterized by a few basic elements, such as the presence of buyers and sellers, as well as a commodity that can be bought and sold.
Markets are designated locations where supply and demand are balanced. Financial transactions happen in a market. Both buying and selling are done in these transactions. Markets come in a variety of forms, whether they be capital markets or commodity markets.
Types of markets in Nigeria
1. Physical Markets
A physical market is a location where buyers and sellers may interact in person and transact for the desired goods. Physical markets include places like shopping centers, department stores, and retail stores.
2. Non-Physical Markets/Virtual Markets
In these markets, consumers use the internet to buy products and services. In such a market, buyers and sellers do not physically meet or interact; rather, the transaction is completed online. Examples are jumia and Konga.
3. Market for Intermediate Items
These markets offer the goods that are used as raw materials in the manufacture of other goods.
4. Knowledge Market
A knowledge market is a system for exchanging knowledge and knowledge-based goods.
5. Capital Market
The type of market where equity shares and bonds are sold and purchased is a capital market. The Nigerian Stock Exchange is another name for the capital market in that country. The financial industry’s powers dominate the control and management of the trade that occurs on the capital market.
Companies and government organizations that want to make long-term investments can use the capital market to assist them put the resources provided to them to good use. Although particular institutions have authority over capital market transactions, the general public can nonetheless view these activities.
Governments and businesses both issue bonds and equity to the general public on the capital market. The majority of loans offered on the capital market are long-term. It is safe to assume that the capital market, also known as the Nigerian Stock Exchange, is a component of the nation’s financial system and deals with capital raising through the issue of shares, bonds, and other lucrative long-term investments. Investments and savings are therefore distributed between buyers and sellers on the capital market.
6. Money Market
The money market is another form of market in Nigeria. In this sector, urgently needed individuals and businesses are given short-term loans. Numerous financial transactions also occur in a money market. One benefit of the money market is that it contributes significantly to the country’s economic growth. Money markets work to maintain a balance between the supply and demand for capital. In other words, the money market aims to strike a balance between the supply and demand for money, although temporarily.
The money market also helps Nigeria’s economy grow since it is always willing to lend money to any area of the country’s economy that needs it. The money market provides funding for a variety of people, corporations, and organizations in addition to other sectors. The money market keeps its doors open to businesses and makes sure that there is always a supply of money. The benefit of providing money to firms is that it increases their general production. In other words, the money market gives corporations and businesses money.
7. Auction Market
A place where a certain kind of object can be bought or sold is called an auction market. There are numerous buyers and one vendor. The item is ultimately sold to the highest bidder after the buyers submit bids on the purchase prices.
Along with the costs of rare artwork and jewels, auction markets may also offer real estate and animals.
8. Black Markets
A market that transacts illegally and operates outside of the sectors that the government regulates is referred to as the “black market.” Any contract for the sale of products in such markets is essentially illegal, thus it is not just void. They can also experience legal or monetary repercussions.
The majority of black market sales are made through cash transactions to avoid paying taxes, making them challenging to track down and tax. They might also be used to market illegally obtained items like animal poaching proceeds or stolen works of art.
Black markets occur when certain goods and services are in short supply in developing countries. An establishment where illegal products like narcotics and weapons are sold is called a black market.
Black markets are not subject to the idea of automatic price setting in accordance with supply and demand. It permits sellers to charge extravagant rates for exceptional or rare goods. Two examples are the ticket scalping and shoe resale markets. Middlemen buy these products in bulk and resell them at inflated prices on the black market.
9. Labour Market
The labor market is the kind of market where people sell their labor to businesses and organizations that require their skills and knowledge in return for pay or income. The term “job market” is another name for this kind of market. In the labor market of Nigeria, businesses supply the need for labor while various employees supply it.
Great-skilled workers with advanced degrees who are also very adaptable and flexible in terms of productivity are in high supply on the Nigerian labor market. The labor offered by the Nigerian labor market is also noteworthy for being incredibly cost-effective. The minimum wage laws, the supply and demand of labor, and other factors all have an impact on the Nigerian labor market.
10. Commodity Market
The trading of various raw resources, including rubber, cocoa, and crude oil, is done on the Nigerian commodity market. In Nigeria, there are several different kinds of commodity markets. Open-air marketplaces, stalls, stores, and online retailers are among them. The kinds of markets we typically encounter in modern culture are open-air ones. People purchase and sell goods in an open marketplace at this kind of market.
Trading takes place in both temporary and permanent stalls in this kind of market. Most frequently, the local government council constructs these stalls. The council often oversees and maintains them. The general public can trade and purchase various consumer goods at open-air markets whenever they need to. These markets include Balogun Market in Lagos, Ajah Market in Lagos, Bodija Market in Ibadan, Igbudu Market in Warri, and New Benin Market in Benin, among others.
Stalls are a different kind of commodity market. The majority of cities and towns have market stalls. Numerous dealers place their goods on display in these built-in stalls where customers can stop by and make purchases. Additionally, these vendors use these booths to store their merchandise. The majority of the stalls are found at tiny street markets and trade shows.
Stores are a form of the commodity market that can be constructed as a standalone structure or as a block of shops. These stores offer a variety of items and commodities for sale to those that require them. On the other hand, online stores are online markets where customers may purchase goods and have them delivered. Online stores like Jiji, Konga, and Jumia.com.ng are among them.
11. Foreign Exchange Market
The type of market that deals with the buying and selling of foreign currency is the foreign exchange market. This kind of market trades any currency there is on the planet. The exchange rate is what determines this trade and exchange. This exchange rate represents the relative worth of different currencies.
Authorized dealers, who are financial organizations for which the Central Bank of Nigeria gives the license to trade and exchange foreign exchange, commonly known as FX, are the key participants in the Nigerian foreign exchange market. The Central Bank of Nigeria (CBN) and its customers, who purchase and sell foreign currency to meet their daily needs, are additional significant participants in the Nigerian foreign exchange market.
People can participate in a variety of parts of the Nigerian foreign exchange (FX) market. Windows are the term for these divisions. They consist of the Bureau De Change (BDC) market, the Foreign Exchange Window for Investors and Exporters, and the Intervention Window.
I hope you have had a good read regarding the types of markets that we can find in Nigeria. Ask me in the comments if you have a question.
- John Aina Ajibola has a Masters degree as an engineer and has over 3 years of teaching and research experience. He is happiest when on a bike and is also interested in electric energy and computer Science.