Recently, the chain hosted faculty members from the prestigious Ivy League, Wharton Business School and the world’s first collegiate business school who are on a two-week tour of South Africa and Kenya.
Nakumatt Holdings Managing Director Atul Shah pointed out that the growth of their stores in East Africa had been inspired by the growing demand for world class retail products and services.
“All Nakumatt outlets are modelled against global standards very much similar to those in Wal-Mart or even Target stores in the US and are also patronised by discerning customers,” Mr Shah told the Wharton Faculty members.
These standards, Mr Shah further added had been reinforced by their investments in Information and Communications Technology.
“Our operations and information management systems are also some of the best in sub Sahara Africa given that we have invested heavily in information technology systems to raise our operational efficiencies,” he beamed.
With such kind of investments, the retail chain believes it can wade off any competition that might be posed by either local or foreign firms such as the rumoured entry of Wal-Mart in South Africa.
“At Nakumatt Holdings, I am always reminding my colleagues that we need not worry about Wal-Mart’s foray into Africa. Our constant worry however, should always be based on our corporate capacity to deliver value to our target customers in a better way than Wal-Mart will ever manage to do in this market,” Mr Shah said.
With a population of more than 140 million people, East Africa, he argued is the next most attractive investment destination for international retailers and as such the market is big for any player that would like to operate here.
The region has an opportunity to sustain at least 10 major retail stores in each town and is presently generating a $300milion (Sh27 billion) turnover amongst the major players.
Industry players forecasts that in the next ten years, close to 25 million customers across the region will have access to formal retail trade facilities with monthly sales reaching the $700million (Sh63 billion) mark and selling space reaching close to 40 million square feet up from the current 15 million square feet.
“This simply means that rather than sit and complain about the entry of international players, existing African retail players must take the first step to raise formal retail penetration,” he emphasised.
But to ensure that they are not complacent, Nakumatt Holdings he added would continue to focus on improving its service delivery.
“This demands that we constantly review our service delivery standards and also ensure that we forecast demand points by signing up to be present in key locations and countries,” the MD acknowledged.
Given that the retail sector is one of the major employers in the region, Mr Shah reiterated the need for the government will to play its part and support the sector to remain a key economic player.
“National governments will also need to appreciate the role of retailers in national economic development. The role of national governments is to provide facilitative incentives that reduce red tape and bureaucracy for investors in the retail sector,” he added.
On his part, Marketing Professor Steve Hoch appreciated the chain’s efforts adding that the adopted model would sustainably afford Nakumatt the necessary resources to play a key role in expanding its operations across the continent.
“We live in a global village and adoption of sound business practices is the only survival hook African businesses can hope to clasp on as multinationals turn the focus on Africa and other emerging markets,” Professor Hoch pointed out.
The tour was part of the 2011 Wharton Faculty International Seminars programme, which provided eight faculty members with a bias in Marketing supply chain and information management studies with an opportunity to meet and engage with Nakumatt Holdings management staff.
Globally, the Wharton Business School at the University of Pennsylvania is reputed as one of the best and most comprehensive source of business knowledge and education in the world.