- As Covid-19 hits industries, disposable income has reduced, travel has been restricted, affecting the purchase of luxury brands.
- Now sellers are having to rethink their business model.
- Brands like Louis Vuitton, Givenchy and Chloe have already started using live-streaming to reach buyers, where an influencer speaks live to audiences for hours, promoting and trying out items.
- For local entrepreneurs, they are betting on online selling.
At this time of the year, Fazal, a luxury boutique in Nairobi owned by Aziz Fazal would usually be teeming with activities. Well-to-do Kenyans would be meeting in luxurious lounges, choosing fabrics, collars, and buttons. Then master tailors would take their measurements, fly back to Italy, and send back the suits after weeks of stitching them to perfection.
In those times, luxury goods shopping has been about the experience, not just a retail sale. Most posh purveyors have been keen to maintain the in-person relationship between fashion adviser and a client, which is key to luxury shopping. But in 2020, it is hard to do so.
As Covid-19 hits industries, disposable income has reduced, travel has been restricted, affecting the purchase of luxury brands like Pierre Cardin, Brioni, Balenciaga and Ermenegildo Zegna, that had started gaining a small foothold in Kenya, thanks to partnerships with local entrepreneurs.
Now sellers are having to rethink their business model. Brands like Louis Vuitton, Givenchy and Chloe have already started using live-streaming to reach buyers, where an influencer speaks live to audiences for hours, promoting and trying out items.
For local entrepreneurs, they are betting on online selling.
“The last 100 days have been an absolute state of crisis. We have had to be innovative on cost-cutting by turning to digital marketing,” says Aziz Fazal of Fazal, The Luxury Boutique.
Aziz, known in wealthy circles, stocks clothes, shoes, and accessories, made by iconic fashion houses such as Salvatore Ferragamo, Giuseppe Zanotti, and Philipp Plein among other brands. The third-generation, family-run retail company has been in the luxury business well over 60 years.
“In this Covid-19 pandemic, Kenyans have more important priorities compared to spending money on luxury apparel and accessories,” says Aziz.
With virtually zero foot traffic in shopping malls at the onset of the pandemic, Aziz says he had to devise technology to a virtual point of shopping, whereby a client can see the entire offering on their website, Facebook and Instagram pages, with purchases made from the comfort of the homes.
But with a drop in purchases, does he have plans of lowering the prices?
Aziz says he decided against lowering prices “at a time where you cannot import anything to sustain or replace your stock” as it can be detrimental to your business and bears no justification in the luxury world.
He is not alone. Chanel, a French fashion house known for its No 5 perfume and handbags, also has no plans of lowering its prices, even as people buy less of its luxury products.
Azizi partly blames fluctuation of the currency, saying that margins on international brands are extremely tight, so much so that it is easy for a business that relies on luxury imports to drown.
But he believes that the pandemic will not stop Kenyans from purchasing luxury goods.
“Luxury will always be embodied in the culture and the DNA of the fine acquired taste of Kenyans,” he says.
Before the pandemic, Muchohi Gikonyo, who runs a luxury car fleet business would transport over 150 people to different destinations.
“We had well over 150 clients at the end of last year,” says Muchohi, who started his First Class Cars business six years ago.
“We worked with everybody from large multinational corporations like Microsoft to politicians and musicians. For instance, we had a partnership with Jameson Connects, so we’ve chauffeured international superstars like American singers 2 Chainz, Mya, Wyclef Jean… even local musicians like Prezzo. We pretty much had the game on lock,” he says.
When he started, he says, he spent millions of shillings buying Mercedes-Benz and Range Rover cars and training chauffeurs to drive the upper echelons of society. For a six-hour ride in a Range Rover Vogue, he charged Sh90,000 while customers looking to ride in a Mercedes-Benz S-Class pay Sh50,000. Since he opened the company, he puts the number of people he has transported at more than 40,000.
But with a lull in weddings, international conferences, music concerts, and political gatherings, the shutdown of international air travel, First Class Cars is screeching to a stop.
“We came into the year with slow business, and as February and March came around,it just went down,” Muchohi says.
However, not all hope is lost for Muchohi. He says this season of Covid-19 has been about pivoting and weathering a storm.
“Kenyans will always be about luxury. Covid or no Covid. The taste for luxury is still there and will always be there,” says Muchohi, adding that for now, luxury service providers will need to combine forces to reach a maximum number of Kenyans and to operate at optimum levels.
In the past few years, young entrepreneurial wealth has grown and so has disposable income, sparking an appetite for luxury goods and services.
From designer perfumes, belts, shoes, to home fittings, international brands have opened stores in Nairobi, seeking to cash in on the expanding middle class and a growing taste for luxury brands. Local entrepreneurs have also refined their craft to meet the tastes of the discerning Kenyans.
Buy local luxury
So has the pandemic sparked a patriotism that will make Kenyans buy Kenyan-made luxury products?
Adelphi, a luxury leather accessories store started by the late Nalani Rupani in 1988, is now in its second generation of ownership, with the company being steered by her daughter, Laila Rupani.
“When an individual looks to replace essential accessories like a wallet, belt, everyday work handbag, they buy from us. So unlike fast fashion that is less discretionary, we occupy our version of an essential good space,” Laila, the director of Adelphi says.
From beaded belts, tote bags to sandals embellished with Maasai beads, Adelphi has seen a new demand for their goods.
“There has been a heightened interest in Buy Kenya, Build Kenya which works for us because our products are made in Kenya. Now more than ever, many of the inquiries and purchases of our products are from locals,” she says.
In a season where the global luxury industry is facing closures, Adelphi’s curation of leather accessories has expanded to home goods, thanks to having a local supply chain.
“We manage our production. Some of our artisans have worked for us for over 30 years. We have invested in their skills. So year after year, our products get better because our workers get better,” Laila says.