Brand fever hits Kenya

Every couple of weeks, new brands enter the country, lured by the high disposable income of a growing middle class and posh mall locations in upmarket suburbs.

Data from the Africa Development Bank suggests the number of middle-class Kenyans has doubled in the last decade to almost a fifth of the population, or 6.5m Kenyans. Kenya’s National Bureau of Statistics recently defined the country’s middle class as anyone spending between Ksh23,670 and Ksh199,999 ($270-$2,300) a month. In demographic terms, it is a group exposed to global trends due to foreign travel, subscription to premium pay TV and access to the internet, and therefore one that is comfortable spending around Ksh5,500 ($64) on a Renzo Rinaldi shirt.

In the last two years, Deacons, the leading retailer in the region, diversified its stable of offerings from predominantly South African and British brands. In August 2013, it signed a distribution agreement with Spanish brands Zara and Massimo Dutti, and this October, it will launch Hong Kong-based brand Bossini in two malls in Nairobi.

South African brands Foschini and Edgars have also announced their intentions to open shop at Garden City Mall on the back of strong 2013 sales.

Upcoming malls in Nairobi including Garden City on Thika superhighway, The Hub in Karen and Rosslyn Riviera are actively competing in terms of who can attract the biggest new fashion brands to the country.

Rosslyn Riviera, for instance, has dedicated an entire corridor on its second floor – ‘Fashion Avenue’ – to top brands in an attempt to position itself as “the preferred mall for fashion trendsetters and lovers of uncompromised style”, according to its brochure.

These international labels, unsatisfied with a strong presence in the Kenyan capital, have expanded their tentacles outside of Nairobi and so the seven premier malls in the coastal city of Mombasa offer a similar profile of clothing and shoe stores including Levi’s, Converse All Star, Nike, Woolworths and so on. And judging by their rapid expansion and positioning, they are turning over the numbers required to justify the heavy investments needed to enter a new country.

“It costs a lot of money to open a shop at Junction,” says Wandia Gichuru, managing director of Vivo, a boutique store at Junction. “You have to pay goodwill. You’re given an empty shell. For any shop in any of these fancy malls, you’re looking at at least $46,200 just to start before you’ve even paid rent.” Shop rents in Kenyan malls increase on average by 10% a year.