I am back from my “business exploration trip” to Kenya and Rwanda and it was a very fulfilling experience on so many levels! It felt like coming home.
Below is finally the first of many blog posts in that regard. I started this one in Kigali and never finalized it – the trip simply kept me so busy from early mornings into the late evenings. I apologize for a sleepy blog during the last two weeks and thank you for your patience. I hope it will pay off.
I just counted the business cards I received – 36. Plus the many more people I spoke to with whom we did not exchange cards. So taking the national holiday in Kenya into account when I arrived, I met well over forty experts and business people in Kenya and Rwanda in those thirteen days. It was some sort of a crazy marathon, but I hope that it now allows me to feed you back details you may otherwise not receive so easily when visiting other Africa Business sites online.
Now let’s get started!…..
I am sitting in a beautiful outdoor restaurant called Shokola in the outskirts of Kigali Rwanda. I arrived yesterday from Nairobi where I spent a week running from one meeting to the other absorbing everything around doing business and investment in Kenya. In fact, I have been so busy that I have not written a single blog post in over a week – the days in Nairobi were hectic but wonderfully fruitful. Sitting now in Kigali overlooking the green hills and parts of the city gives you a bit of a spa experience – I really needed that. It’s a world away from busy, buzzy Nairobi, East Africa’s business hub. Having said that, I thoroughly enjoyed being in Nairobi, and if you are following our Africa Business Jumpstart page on Facebook (I hope you do!), you have been a witness to that. I was amazed by the open and dynamic attitude of many Kenyans, the extent to which they welcomed and assisted me, their drive, their hospitality and the excellent service they provide most of the time.
I collected a lot of information and I will need to write several blog posts to share everything I saw, learned and heard. So now let me start sharing some of the insights I gained in Nairobi. Here is a list of random, colorful Kenyan business insights which I received from the people doing business in Kenya already.
1. Leather more profitable than bars & restaurants, says entrepreneur
I had the pleasure to meet with Mr Vasu Abotula who I was introduced to by the Kenyan Leather Development Corporation. I met Mr Abotula for a meeting in one of his bars where I ordered fresh mango juice. He is a Kenyan citizen and a rather high-profile accountant in Nairobi. About four years ago he ventured out to start his own business with a partner. He invested in both the leather industry producing shoes and he manages a couple of upper-class bars. Today, according to Abotula , he owns 4 shoe shops and 8 bars. He started the leather ventures from scratch, while he simply upgraded bars he bought from someone else.
“Which one is more profitable for you?” I asked.
“The leather without a doubt.”
His shoe company, K Shoes, now features for the first time on the Nairobi Stock Exchange. Mr Abotula asked me to spread the word, so people will buy shares in his company. The first round for public offering will only be open for a few more days – so hurry and get in touch if you are interested or join the next round in the coming year. I can get you the full details in a report upon request. Mr Abotula plans to open 25 shoe shops in Kenya in the next 10 years.
TIP: Kshoes is importing all its accessories such as shoe soles from East Asia. Mr Abotula said leather and shoe accessories would also be a very profitable business for anyone who would start manufacturing those in Kenya. This was confirmed to me by the CEO of the Kenya Leather Development Council.
Of course, the bar & restaurant business can be equally profitable, but it demonstrates that some of us may have overlooked the potential of the leather industry if you are looking for a profitable business. If you are interested, please get in touch with the Kenya Leather Development Council, they can assist you.
2. Building enterprise solutions is the way to go with ICT
I met with the great people at Nairobi’s ihub which is the leading tech hub in the region. We spoke about Kenya’s tech sector and some of the more profitable strategies. Josiah Mugambi, iHub’s Executive Director, told me that a lot of people were into building apps or mobile money services. “There was a real hype around that. Having your own app was kind of cool. “ Josiah said. While many of them have been very successful the biggest gap in the market now is the B2B (business to business) service sector. “There is an immense gap for digital business solutions in Kenya. Our tech community is not really used in addressing that but we have been pushing them more towards that, because there is a lot to be done in this regard.” So if you want to enter the ICT sector in Kenya or the wider region, developing digital enterprise solutions is viewed as a top strategy by the experts.
3. You have land to invest in? Go for real estate or high-quality agricultural produce
The real estate sector in Kenya is at this time still one of the top investment options according to business experts on the ground who I spoke to. Houses for the upper class sell almost immediately, highly attractive office space was also in great demand, I was told, or estates for lower middle class families – these three categories are your best bet.
People from Growth Africa told me that quality of agricultural produce is often low and that there was a real gap in this regard. They took tomatoes as an example. Although tomato harvest has a surplus in some years, there was a need for producers who could deliver reliably throughout the year and produce tomatoes that are of same size and shape. This consistency was rare but according to them it was precisely what some buyers on the upper market in Nairobi were looking for.
It confirmed to me what Tunde Ogunrinde from QSR Consult in Nigeria had told me when we met at an expo in London earlier this year. He is producing tomatoes under green house conditions, and he cannot meet the demand for his high-quality produce, although tomatoes are sadly regularly rotting away in the fields of other farmers.
Agricultural greenhouse production – even at small scale as we have learned, can allow you to grow rapidly, because the demand for such produce is so high.
4. Digital marketing strategies – you will be somewhat of a pioneer!
I have never seen paper billboards as big as those I saw in the streets of Nairobi. I mean they are huge, and in some areas they seem bigger than the houses. If there was a contest for ‘biggest billboard display worldwide’ I am sure Nairobi would be one of the top contenders. I smiled when I recognized some of the young start-ups that I had been reading about in the media on those billboards.
I asked representatives of larger enterprises how they were marketing their products and services. Almost all mentioned billboards and the radio, one mentioned specialist magazines. And this in a digital era and in a tech hub like Nairobi, I was seriously surprised. I then asked KenInvest to link me up to a couple of marketers – we met a few days later. One very competent lady even had the motorcar company Ford among her clients and still none of them were using digital marketing! And that although Africa has the highest growth rate of mobile phone users worldwide and according to various media sources is expected to go through an ‘Internet revolution’ soon.
By the way, the situation in Rwanda was very much the same – just the bill boards were a bit more modest.
Now, you have two very smart choices: Either to start a digital marketing company as a business with very little competition or to integrate professional digital marketing into your own sales strategy (regardless of your industry) – both will make you very competitive ! Not only is it usually a much cheaper way of advertising, but I am also convinced that more people will notice.
5. Nairobi ? No, think 46 more Kenya counties for success!
Of course Nairobi is a great business hub with huge potential, but I have received insights regarding investments in Kenya’s largely overlooked counties such as those in the Western Region bordering Uganda or in the Maasailand to name a few. I met with people with connection to the governors of those counties and was told that the counties have recently become more decentralized and are given their own budgets for development. Many of the counties in the periphery faced problems in reaching out to investors and as a result some of the money – I was told – had to be given back to the central government. There was very fertile land available for agricultural development in the Western Region and a lot of space for real estate development in the East, similar situations may be found in many more locations. Overall, the counties were looking for interested business people and investors across sectors such as telecommunication, infrastructure, agribusiness, and housing. Prices and competition are much lower in counties far away from Nairobi – so it is a strategy you should certainly consider. There is a great will in many of those administrative areas and you would be welcomed with open arms I was told. I think, it’s worth considering !
Hope you found my first post with random Kenya business insights hopeful. Some more to follow!
And please feel free to share your feedback regarding my post or ask questions, I am happy to provide you with more details and I am sure others in our Africa Business JumpStart Community are also ready to assist. Let’s keep marching!
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