52pc of local family businesses pointed to rivalry with international brands found locally as the second most pressing challenge after corruption.
Only 46 percent of family businesses were worried about domestic competition.
This indicates that many local enterprises regard global brands as a threat to their existence.
Family businesses in Kenya have expressed worry over increasing international competition, saying it is posing a key threat to the continuity of their enterprises.
According a new survey by audit firm PwC, 52 percent of local family businesses pointed to rivalry with international brands found locally as the second most pressing challenge after corruption.
Foreign competition was cited alongside accessing the right skills and capabilities (52 percent) and prices of energy and raw materials (52 percent) as top challenges.
Interestingly, only 46 percent of family businesses were worried about domestic competition, an indicator that many local enterprises regard global brands as a threat to their existence.
“Fifty-two percent of local family businesses worried about increasing international competition more than the global average of 38 percent. This is the second greatest challenge after corruption. Both globally and in Kenya our survey respondents shared concerns about new market entrants and their potential to topple established businesses,” said the report.
International brands have in the recent past entered the local market especially in the retail and manufacturing sectors posing new competition to local players. For instance, French retailer Carrefour has since its launch in 2016 opened several branches in a race to fill the gap left by Nakumatt and Uchumi, posing a threat to family run supermarkets like Naivas, Tuskys and Quickmart.
Cheap imports
Supplies from all over the globe and especially from China have found their way to multiple regions around the country, with supermarket shelves especially mainly occupied by the cheaper imports, including peanut butter and tomato sauce.
Local dispensing chemists are also mainly supplied by India and China, meaning that local pharmaceutical firms too are losing out on the local market.
Founder and chairman of local drugs manufacturer Dawa Group, Dr Raju Mohindra, said they are dealing with competition by innovating digitally.
“The influx of imports from markets like China and India require thinking innovatively about our Business 2Business (B2B) model and just like online retailing, our traditional models in the pharmaceutical sector will be disrupted,” he said.
The PwC study was conducted between April and August last year and interviewed senior executives and next generation respondents from 46 family businesses.
It interviewed firms with a turnover ranging from Sh500 million upwards.
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Note: The results are not exact but very close to the actual.
