Thursday, February 8, 2024
The Chinese are hiring Kenyans to assess what the Kenyan market needs, so they can buy better, cheaper supplies in bulk.
As I made my way through the bargain hunters, I tripped over a bucket, then onto a mattress lined up on the sidewalk. Here in Kamukunji, in downtown Nairobi, business is booming.
Traders display their wares on the sidewalk. From suitcases to tea strainers. Carpets, blankets, and duvets hang from the balconies of high-rise buildings, and the stairs are stifling, steep, and oppressive, and you'll have to scrape up against the railings.
There are no vacant stores like in other shopping malls in Nairobi. These small shops have hundreds of traders eagerly selling their products. With the start of the back-to-school season in December, the market is lively. Business is booming as thousands of low-income and middle-class Kenyans crowd the aisles to buy cheap goods.
“The market is usually super crowded during busy seasons such as Christmas and the back-to-school rush in January, and there are very few places to walk through at this time of year. It gives us a different perspective on our fast-growing business. But things are not as rosy as many people imagine,” says Kamukunji chairman Peter Muturi Kariuki.
I went back in February and as Mr. Kariuki said, there was no spike in transactions as you can easily see there were a lot of buyers in the building. The sidewalks are also less crowded.
Mr Kariuki said the drop in business was due to the entry of Chinese traders who set up warehouses to cater to bulk shoppers and stores selling cheaper goods, such as China Square and now South African retailer Panda Mart. It is said to be the cause.
According to Kariuki, in its heyday, Kamukunji was the only place besides Eastleigh where you could buy goods at the best wholesale prices, but that position has since been curtailed by the growing presence of foreign wholesalers. .
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The situation has worsened further due to a surge in unemployment and a surge in hawking activities gobbling up a significant portion of the market pie that Kamkunj's permanent vendors enjoyed earlier.
Fallen Burst
“We have strived to import new and unique products, and here you can find everything under one roof. However, the majority of Kamkunji's supplies come from China. “Chinese traders are now coming to Kenya and they are dominating our market,” Kariuki says.
He added: “Almost the entire industrial area has been occupied by the Chinese. Unlike before, transportation costs have become so high that people who previously sourced goods from outside now have to resort to purchasing. “The situation is getting worse because of the situation,” he added. From our warehouse or online purchase. ”
Kariuki said the Chinese are hiring Kenyans to assess what the Kenyan market needs so they can introduce better quality and cheaper supplies in bulk.
Mr. Peter Muturi Kariuki, Kamukunji Market Chairman, Kamukunji Market, Nairobi, January 29, 2024. Photo | Billy Ogada | NMG
many other traders BD life Those I spoke to during a recent visit echoed similar sentiments. Frustrated traders say it is highly unlikely they would set up similar operations in China, but weak enforcement of labor and immigration laws makes it easy for Chinese nationals to operate freely in Kenya. It has become.
The Chinese mainly sell second-hand clothes, carpets, shoes, and down products from industrial areas and along Mombasa Road that they buy from China.
Kamkunj imports, supplies and retails a large number of products such as electrical cables, tableware and toys.
According to the third quarter balance of payments report, Kenya's imports of goods from China in the nine months to September 2023 amounted to Sh322.9 billion, compared to exports of a paltry Sh20.7 billion. It became.
Local traders are slowly becoming spectators to the game they have been playing for years.
Kamukunji also faces competition from other markets that have sprung up in Dubois Street, River Road, Eastleigh, Biashala Street and Nyamakima in Nairobi and sell the same reasonably priced products.
Hawkers are also wreaking havoc. They source their products from godowns and sell directly to customers at slightly lower prices than vendors in their stores.
“There are no additional costs for peddlers, such as rent, labor, licenses, electricity, etc. Everything is on display and the prices are low, making it easier for buyers to go to the store,” Kariuki says. says Mr.
“What if we all became peddlers and had a fair chance of earning a living,” he added.
shilling weak
The weaker shilling also weighed on profits. The current price per dollar is $160, but Kenyans are attracted to Kamkinji because of its low price, with traders saying they are spending more on buying their own shares and cannot afford higher price increases. There is.
“Business was good because everyone could get things from abroad. When the dollar exchange rate was about $100, you could manage your books and know how to mark profits. ” says Kariuki.
Mary Wanjiku, also a trader in Kamukunji, has been involved in the wholesale business since 2013, but is dissatisfied with the current profits.
Mr. Peter Muturi Kariuki, Kamukunji Market Chairman, Kamukunji Market, Nairobi, January 29, 2024. Photo | Billy Ogada | NMG
“I can't say we're making a profit at the moment. When we started, we received products from a warehouse in China, but after a while, we started going to China to pick up the products ourselves.” she says.
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Wanjiku said he used to travel to China at least twice a year because his business was thriving, profits were good, and his products were in demand.
“But with the high cost of living, we can't travel anymore. Our business is moving away from what it used to be,” she added.
Traders say they have little ability to compete in the face of falling prices. Jacinta Njeri, who owns a hair salon, echoes their frustrations and says she is losing her license and the ability to clear her cargo through customs.
She said there is unfair competition from the Chinese, who import in large quantities without paying as much money to the tax office for customs clearance of their cargo.
“We pay for these goods when they leave the port, but in between there are other payments too, let's not forget the shop license. It’s the same cargo you’ve been paying for,” she says.
Njeri said he now earns only a quarter of the profit he was making before everything changed.
“If you happen to make a profit of Sh300,000 after being on the brink for the past six to seven months, you are lucky,” Kariuki added.
For them, profits are almost zero, and the customers they expected don't come to buy. Merchants are clinging to seasonal profits.
→ mrsitawa@ke.nationmedia.com
