Luxury brands flock to Kenya as middle class tastes grow

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 X. N. 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.

This has created a legion of savvy consumers given their exposure to global trends due to foreign travel experiences, subscription to premium pay-TV and access to the Internet.

“Social media plays a big role in influencing peoples’ choices especially in fashion. Through the Internet, Kenyans are exposed to high street fashion and designer trends,” said Ria Ana Sejpal, a luxury fashion brand consultant at Kemaya Africa.

Kemaya Africa is a luxury apparel store that offers high-end women’s clothing specialising in ‘versatile evening wear’ made by global fashion designers.

Ms Sejpal said the firm’s collections, which retail at an average of Sh40,000, mainly target women ‘in search of international aesthetics blended with a Kenyan taste.’

Kemaya Africa has exclusively signed up six Bollywood fashion icons —Nikhil Thampi, Rohit Gandhi, Rahul Khanna, Ritu Kumar, Deepika Padukone and Sabyasachi Mukherjee — to produce unique designs for its clients in Kenya and across the African continent.

In addition to apparels, Kenyans are demanding finer drinks, especially single malt whiskies and champagne, with international brands looking to grow their market share locally.

“The middle class in the country is growing and Kenyans are travelling to London, Paris, and Dubai, and they come back to Kenya with the experience. I am seeing more people drinking champagne, single malt scotch and cognac. I am not saying that they have stopped drinking beer, but on special occasions, they are having fine products,” said Moët Hennessy’s marketing manager for East Africa, Nicolas Ruellan.

Moët Hennessy is part of the world’s largest luxury group, Moët Hennessy-Louis Vuitton (LVMH), which has over 60 brands. The company started active engagement with the Kenya market last year.

(Read: Moët uncorks new bubbly in Kenya)

Analysts project the recent oil and gas find in Kenya is likely to fuel economic growth and propel more people to join the middle income bracket.

“More interestingly is the prospects of a great economic future time driven by the oil and other natural resources,” said Dr Iraki.

The African Development Bank defines persons with an annual income exceeding Sh340,000 per year and spending between Sh500 and Sh900 ($6 and $10) daily as being in the middle class but experiential analysis suggests this is too low.

Dr Iraki also attributed the increased uptake of luxury brands by Kenyans to the budding culture of malls, which he says provides the space and hype to make buyers feel such shopping malls are the places to be.

Deloitte & Touché notes that Africa’s middle class have more recreational time, creating demand for lifestyle products that range from fashion, jewellery, accessories and cosmetics.

In a report titled The Rise and Rise of the African Middle Class, Deloitte says Africa is not impervious to new global trends and influences that are fast shaping consumer behaviours and consumption patterns.

“Their spending patterns are being dictated and shaped through media and other influences as Africa opens up,” reads the report.