Why business at Kamukunji Market is no longer rosy

Pushing past the bargain hunters, I stumble on buckets, then on mattresses lined up on the sidewalks. Here, at Kamukunji in Nairobi's downtown, business is booming.

Traders have displayed their wares on sidewalks; from suitcases to tea strainers. Carpets, blankets and duvets hang on balconies of high-rise buildings with stuffy, steep, squeezed staircases that you keep rubbing your body on the rails as you walk up.

There are no vacant shops as is the case in other shopping malls in Nairobi. In these small shops, there are hundreds of traders eager to sell. It is December and back-to-school season and the market is throbbing. Business is booming as thousands of low-income and middle-class Kenyans alike jostle through the pathways to buy cheap items.

‘’The market is usually overcrowded during peak seasons like Christmas and the back-to-school rush in January and there is almost nowhere to pass during this period. It gives a different idea of our booming business, but it is not as rosy as many imagine,'' Kamukunji Chairman Peter Muturi Kariuki says.

I am back in February and true to Mr Kariuki's words, there was no flurry of trade, you could easily tell by the number of buyers in the buildings. The walkways are less crowded too.

Mr Kariuki faults the drop in business on Chinese traders who have set up warehouses for bulk shoppers and the entrants of stores selling cheaper items such as China Square and now South African retailer Panda Mart.

In its heyday, Mr Kariuki says, besides Eastleigh, Kamukunji was the place to go for goods at the best wholesale price, but this has since been stifled by the growing presence of foreign-owned wholesalers.

Read: Business bears brunt of protests as stock market indifferent

The situation has worsened further by ballooning unemployment, which has seen a surge in hawking activities that are munching a sizable piece of the market pie previously enjoyed by the permanently established vendors of Kamukunji.

Foreign burst

''We have been trying to import new, unique products and you can find everything under one roof when you come here. But a majority of supplies in Kamukunji come from China while few are from Dubai and other countries. With Chinese traders now in Kenya, they have dominated our markets," says Mr Kariuki.

He adds: "Almost the whole of the Industrial Area has been taken over by the Chinese. The situation is even worse because it is now very expensive to travel, unlike before, so people who used to source goods from outside are now resorting to buying from warehouses or online purchases.’’

Mr Kariuki says that the Chinese have hired Kenyans to assess what the Kenyan market needs so that they can bring in bulk stocks of even better and cheaper supplies.

Many other traders BDLife spoke to during a recent visit expressed similar sentiments. The frustrated traders say they can hardly think of setting up similar businesses in China, yet weak enforcement of labour and immigration laws has made it easy for the Chinese to operate freely in Kenya.

The Chinese largely sell second-hand clothes, carpets and shoes sourced from China and godowns in the industrial area and along Mombasa Road.

In Kamukunji, they supply and retail electrical cables, utensils and toys, among other products they import in bulk.

According to the third quarter Balance of Payment report, Kenya's imports of goods from China in the nine months to September 2023 were worth Sh322.9 billion against a paltry export figure of Sh20.7 billion.

Local traders are slowly being reduced to spectators in the game they have been playing for years.

Kamukunji is also facing competition from other markets that have sprouted on Nairobi's Dubois Street, River Road, Eastleigh, Biashara Street and Nyamakima, selling the same fairly-priced wares.

Hawkers are also a major disruption. They source goods from the godowns and directly market them to clients at a price slightly lower than the vendors in the shops.

‘’The hawkers don’t incur expenses like rent, labour, licenses and other extra costs like electricity. It makes it easier for the buyers because they don’t struggle to get to the shops when everything is at their display and at a cheaper price as well,’’ Mr Kariuki says

‘’What if all of us become hawkers so that we can all be able to earn a living fairly,’’ he adds.

Weakening shilling

The weakening shilling has also eaten into their profits. At 160 per dollar currently, the traders say they spend more in buying their stock and cannot add a high mark-up because what attracts Kenyans to Kamukinji is its low prices.

‘’Business was good because everyone could get things from outside the country. When the dollar exchange rate was around 100, it gave us access to how to manage the books and mark our profit,'' Mr Kariuki says.

Mary Wanjiku, also a trader at Kamukunji, has been in the wholesale business since 2013 and is unhappy with the current profits they are making.

''At the moment, I wouldn't say we are even making profits. When I started, I used to get my items from the Chinese warehouses but after a while, I upgraded to going to China to get the goods myself,'' she says.

Read: Irony of a weak shilling and declining export earnings

Ms Wanjiku says she used to travel to China at least twice a year because of her thriving business, good profit and demand for items.

''But I can't travel anymore because of the high cost of living. Our business is drifting from what it used to be,'' she adds.

The traders say they can barely compete when faced with price undercutting. Echoing their frustrations, Jacinta Njeri, who owns a beauty parlour, says they are losing out on licences and cargo clearance.

She says there is unfair competition from the Chinese, who import in bulk without having to pay as much to the taxman for cargo clearance.

‘’We pay for these goods when they leave the port, there are also other miscellaneous payments in between, not forgetting the shop licence. You pay for many things yet it's the same cargo you have been paying for all along,’’ she says.

Ms Njeri says now she only makes a quarter of the profit she used to make before everything changed.

‘’If you happen to make a profit of Sh300,000 after being on the edge for the last six or seven months, you're lucky,’’ Mr Kariuki adds.

For them, profits are down to almost nothing, their expected customers are not coming to buy. The vendors are hanging on to the seasonal profits.

→ [email protected]