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Why ‘kadogo’ retailers will not fade away soon

Small-scale retailers remain a critical plunk servicing Kenyan consumers in a sector that is replete of local and global players. Amid the changing retail space characterised by an influx of global retail chains; emerging and established supermarkets, a significant retail spend will continue being tapped by corner shops, wholesalers and mini-stores.

This debunks concerns that the gap left by struggling retail chains like Nakumatt and Uchumi could cripple the supply chain locally even as global newcomers dig in for a piece of Kenya’s estimated Sh1.8 trillion retail spend.

While tracking retail shopping patterns since 2004 research firm Consumer Insight established that supermarkets and mega shopping malls enslaved a critical mass of Kenyan consumers on account of the allure and convenience.

This group is mostly the middle-and upper middle class citizens most of whom reside in towns and cities, and constitute a small percentage of Kenyan consumers. The rest are serviced by small or ‘kadogo’ retailers.

But growing uptake of e-commerce and dwindling fortunes of leading supermarkets seem to have emboldened performance of small retailers, who are popular among consumers for their notoriety to unpack household consumerables then repackage into small or “kadogo” quantities.

The fact that these small retailers cover the whole country falls along the strategic mapping of the fast-growing e-commerce experience, which continues to deepen on increased smartphone usage greatly favours these retailers.

Banking on immediacy, low costs devoid of brick-and-mortar operation costs, e-commerce is giving more small retailers the perfect platform to reach out to customers in a country where it is estimated that two in every three Kenyans have access to the internet.

A business intelligence report titled ‘White Paper 2017: Trends from the Kenyan Smartphone and E-Commerce Industry’ says that 67 per cent of Kenya’s population is classified as internet users with more than 30 million people having access to the internet.

Amid the buzz of incoming international retail brands and local takeovers of struggling retail chains, these kadogo retailers will continue sustaining the value chain playing a critical component for many Kenyan shoppers on account of spread, location, convenience and cost.

Geographic area Being local and agile makes small retailers in key geographic areas countrywide to service customers on a level that would be difficult or even impossible for supermarkets. Being close to customers also lets them spot market trends faster.

Online e-commerce platforms such as Kilimall, Jumia and OLX are giving small retailers a lifeline with their platforms that enables them to sell goods and services online. “Everything is now online. Our advantage is that platforms like Jumia are doing all the advertising for us.

We just take pictures and post the products online then worry about sales and deliveries,” says Hanson Karaja operating as Nakutech Trading on River Road, Nairobi.

Furthermore, the small retailers are also considered to be more organised and are not ridden with as much debt as some supermarkets according to a Study on Kenya Retail Trade Sector Prompt Payment, June 2017. The report notes that small and medium-sized retailers and wholesalers paid their suppliers promptly compared to the big retailers.

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