By Staff Writer
Despite the slow growth in the Kenyan economy, the number of investors seeking a piece of the ever growing luxury retail sector is on the rise.
Available figures show that the uptake of luxury items such as clothing, cars and household accessories have placed the country as a good investment destination for foreign brands.
Among the factors that have been key in driving that growth is the rise of the middle class, existence of a sizeable number of expatriates and the rise of dollar millionaires- who have a taste for luxury brands.
The 2016, Knight Frank wealth report indicated that dollar millionaires in Kenya rose from 8,760 in 2014 to 8,962 in 2015.
The momentum is expected to carry on in the New Year and will see a rise in the number of international luxury brands setting up shop in the country, whether through partnerships with local operators or through franchises.
Some of the brands slated for opening in the first three months to March 2017 are; French retailer Carrefour, Fochini Group of South Africa, LC Wakiki-a Turkish luxury clothing line- and Virgin Active, a platinum health club founded by billionaire Richard Branson.
Kenyan’s international outlook on fashion and entertainment drives them to look across the border for a great deals and diversity when it comes to their luxury brands crave. E-Commerce has greatly boosted brand retail uptake for those who cannot travel to Dubai, New York or other destinations for shopping.
A trend among the Kenyan rich when it comes to purchasing cars is buying armored vehicles. Dubai based Joz Group has sold over 1,000 of the luxury vehicles to Kenyans who buy them as an added security measure.
Although spending on luxury items could be considered an investment in non-productive items by many, Kenya can take advantage of the new trend by establishing itself as a shopping destination in East Africa.
Compared to her neighbors, the country has enjoyed a considerable political and economic environment.
Creating a conducive environment for investors in such high end products would place the country in the leagues of nations such as Dubai, and offer an alternative offering for those seeking to market the country as a regional tourism destination.
The emirate of Dubai has today positioned itself as a commercial hub for foreign trade and investments in the Middle East due to its geographical and strategically good location, with massive re-export to Asia and Africa.
Luxury brands like Alexander MacQueen, Calvin Klein, Billionaire, Bugatti and Givenchy have set up business there. The ease in transport and traveling requirements has made the country popular with Kenyan private shoppers and retailers seeking to buy house hold items, automobile spare parts, cars and jewelry at wholesale prices.
Because of established ethical ways of doing business, Kenyan traders in items that require high levels of investments such as gold have confidently injected their money without the fear of losing out to unscrupulous business men. The Deira Gold Souk is lined with hundreds of shops selling gold; everything from gold jewelry to gold bars at some of the best bargains in the world.
Dubai based real estate Company Emaar Group set office in Nairobi seeking buyers for its over the top development in Dubai, joining the list of foreign realtors who have seen a potential in Kenya’s rich.
As a known shopping destination, Dubai has perfected the art of luxury shopping and experiences. In a city where the police patrols in Lamborghinis, more effort has been put to ensure exclusivity for local and international shoppers.
UAE possesses the world’s seventh largest oil reserve and the economy was formerly highly dependent on export of natural resources. However, this dependency has been reduced by a focus on creating a diversified economy, and through the integration of a strong liberal trade policy attracting foreign trade and investments.
This has resulted in a substantial population growth, a growing economy and thriving sectors of retail, construction, tourism, healthcare, energy and environment.
The entry of luxury brands in Kenya can be its opportunity to cash in and replicate the Dubai success story.
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