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Bulk buying trend grows Kenya’s retail sector by 13pc

The availability of quality products and better prices for bulk purchases was the second driver of the growth of the sector despite the business challenges in 2016/XINHUA FILE

NAIROBI, Kenya, Feb 7 – Kenya’s retail sector grew by 13 percent in 2016 lifted by a rising consumer trend of bulk buying, according to a new survey by Procter & Gamble.

The availability of quality products, specifically branded items, and better prices for bulk purchases was the second driver of the growth of the sector despite the business challenges in 2016.

P&G Managing Director Vivek Sunder noted that supermarkets are quickly becoming the preferred channel as more outlets open in residential areas, contributing to the segment’s 18 percent growth.

“Proximity to consumers is one of the big drivers for supermarkets. The local store as a channel is gaining importance within the retail space,” he said.

A total of 470,000 square meters of land are occupied by malls and proposed shopping complexes. This makes Kenya a distance second to South Africa that leads with 3.5 million square meters.

“To break it down, Kenya’s retail is growing faster than the economy. Chain retail developing is an indication of economic development due to shopping dynamics in that channel, such as bulk shopping.”

Although certain retail chains struggled over the period, this was countered by the mushrooming of small and medium outlets in residential areas, Anthony Ng’ang’a, Brand and Commercial Operations at Procter & Gamble explained.

Globally, Euromonitor projections show that total retail is expected to grow by 84 percent to US$16 Billion in 2020 from the current US$9 Billion in 2015.

However, traditional retail still dominates the markets. According to Sunder, traditional trade will continue to be the dominant despite declining in importance.

The survey also revealed that M-commerce in the country has tripled in the past two years, making it the fastest growing sector in retail. It is also the biggest driver within non-store retailing.

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“Better technological infrastructure coupled by increased internet penetration and smart payment methods is boosting non-store retailing.”

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