Luxury brands flock to Kenya as middle class tastes grow

Samsung Electronics East Africa marketing manager, consumer products, Ronald Arao (seated) demonstrates how the new Samsung 85” ultra high definition HD TV at Mayfair Suits in Nairobi last month. The television set costs Sh3.7 million. Photo/Diana Ngila  Nation Media Group

By DAVID HERBLING and WANGUI MAINA

In Summary

• Spanish clothing retailer Zara entered the market last week through a distribution agreement with local retailer Deacons, which also launched the Massimo Dutti clothing line last week.
• British shoe retailer, Clarks, has expressed interest in opening three stores in Nairobi this year as the firm seeks a slice of Kenyan buyers with deep pockets.
• South Africa-based retail chains Foschini and Edgars are planning to set up shop at the upcoming Garden City Mall on Thika Road by the end of 2014.
• The number of Kenyans classified as middle class has doubled in the last decade to almost a fifth of the population or 6.5 million Kenyans, data from the African Development Bank (AfDB) shows.

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• Kenya’s shifting middle class tastes draw in luxury brands

Kenyans’ increasing taste for trendy fashion is attracting global luxury brands to Nairobi seeking to cash in on an expanding middle class with higher disposable incomes.

International brands positioning themselves to exploit the growing appetite for the finer things in life — from clothes to shoes and drinks — are also driving the development of shopping malls to house the stores.

“Increased income and global exposure are making Kenyans go for such brands. Many Kenyans are well travelled and know which brands are status symbols,” said Xavier Iraki, the MBA co-ordinator at the School of Business, University of Nairobi .

Spanish clothing retailer Zara entered the market last week through a distribution agreement with local retailer Deacons, which also launched the Massimo Dutti clothing line last week.

Deacons, the leading retail chain in the region, will in October launch Bossini, a worldwide garment distributor and retailer label, based in Hong Kong, into the market with new stores in Yaya Centre and Village Market.

South Africa-based retail chains Foschini and Edgars are planning to set up shop at the upcoming Garden City Mall on Thika Road by the end of 2014.

(Read: SA’s fashion chains Foschini and Edgars to open in Nairobi)

British shoe retailer, Clarks, has expressed interest in opening three stores in Nairobi this year as the firm seeks a slice of Kenyan buyers with deep pockets.

“A sizeable number of expatriates —UNEP, UN workers and foreign investors — could also be driving the brands’ entry to Kenya,” said Dr Iraki

Deacons managing director Wahome Muchiri said increased exposure to international brands through travel, the internet and social media was also driving demand in the local market.

“There is a lot of interest. Customers are looking for more fashionable options and recognise these brands,” said Mr Muchiri.

Foschini Group has more than 200 stores in Southern Africa. Its foray into Kenya is part of a long-term growth strategy to increase earnings, having grossed Sh128 billion (R12.8 billion) in sales in the year to March 2013

“Our strategy is already in place and we will soon be opening three stand-alone stores in Nairobi early next month. We are working with our Franchise partners Nakumatt,” said wholesale manager in charge of Middle East and Africa at Clarks International, Loveth Monteiro.

The number of Kenyans classified as middle class has doubled in the last decade to almost a fifth of the population or 6.5 million Kenyans, data from the African Development Bank (AfDB) shows.

It means that one out of every five Kenyans is considered middle class — a status mostly defined by tertiary educated persons holding salaried jobs or owning small businesses, urban residency and ownership of household goods such as refrigerators, phones, flat screen TVs and automobiles.