NAIROBI, Kenya, May 26 – Supermarket chain Nakumatt Holdings has entered a partnership with insurance and travel solutions provider FIT Xpress to offer the services from the retailer’s stores.
The new Nakumatt FIT Xpress travel, personal finance and insurance services will initially be available at Nakumatt Mega Hypermarket branch on a pilot basis and is part of Nakumatt’s strategy to introduce a comprehensive suite of travel and tours, consumer finance, stock broking and insurance services.
Speaking during the launch ceremony, Nakumatt Holdings Information Technology Director Sailesh Savani said the firm was committed to adding value to their customers.
“Demand from our customers has pointed us to this direction as we strive to guarantee convenience and lifestyle enrichment,” he said.
Last year, Nakumatt introduced its finance services solutions through its credit card product in partnership with Barclays Bank of Kenya.
In the new partnership, Nakumatt shoppers will access a range of products such as consumer loans for items within Nakumatt, insurance premium financing, insurance covers and travel agency services.
According FIT Xpress Managing Director Karim Dhalla, the new partnership heralds the dawn of retail financial and travel services outside banking halls and insurance company premises.
Registered with the commissioner of insurance and related regulatory agencies, FIT Xpress has in turn sealed partnership agreements with leading financial services providers and insurance underwriting companies.
“We are here to bring retail financial and travel services nearer to you from car insurance to CDS (Central Depository System) account openings,” said Mr Dhalla.
Globally, the first big name retailer to break into the financial services market was Marks & Spencer (M&S) in 1985. British retailers Sainsbury\’s and Tesco later followed suit in the mid-1990s unveiling their personal finance businesses.
Their entry effectively marked the dawn of a new era when supermarkets started to seriously take on the banks and insurance companies.
In its market research earlier this year, UK based financial services outsourcer, Opal, revealed that traditional financial services companies fear that supermarkets will pose the greatest threat to their business in the next decade.
The survey was conducted among some of the largest leading financial services providers in the marketplace, including high street banks and building societies, specialist investment providers and insurers.
Opal noted that supermarkets have been able to enter and achieve significant market growth for several reasons: consumer confidence in their brands; diverse product range spanning many financial sectors; the ability to source products from a broad range of providers – without any perceived fears of conflict of interest which often inhibit some financial companies; and almost fully outsourced operations meaning costs are kept to the minimum.
Opal managing director, Tony Collins, commented: “The dynamics for distributing the standard financial products that most people require, to meet basic protection, savings and investments, pension and insurance needs, have changed.”
Whilst people don’t necessarily want a one stop shop, they also don’t want to trawl around different providers. The more enlightened companies have used the same tactics as supermarkets to increase their product ranges by adopting a white label proposition.
Still in the UK, the largest supermarket based financial based service provider remains, Tesco Personal Finance, established as a joint venture with the Royal Bank of Scotland in 1997. Last year, the supermarket used its 1,780 stores to generate over £200 million from selling its financial products to over five million customer accounts