Interior décor: Investors find success in shunned towns
Celine Mulongo, head of furniture section at Furniture Palace Eldoret.
For the longest time, homeowners and real estate developers in periphery counties had to travel to Nairobi, Mombasa or overseas to shop for premium quality construction materials and furnishings to spruce up their homes.
But now furniture and interior décor shops have spread their tentacles in different counties to cash in on the construction boom in areas previously seen as remote.
In North Rift, from Furniture Palace, South Africa-owned CTM to Ashley Furniture home store, HEET Tiles Centre, Dr Furniture among others have opened stores in Eldoret town.
Investors, previously concentrated in big cities, where profit margins were reducing due to cutthroat competition, are now seeing potential in counties.
Some have opened small, artisanal shops with exquisite unique items positioning themselves to woo middle-class and wealthy customers who have relocated to counties or are building second or third homes.
Furniture Palace, which has branches countrywide recently opened a store off Eldoret-Kapsabet road. It is home to over 25,000 items, from tiles, kitchen, all kinds of paints, roofing materials to kitchen appliances and building materials like steel and cement.
Mahendra Patel, one of the directors of Eagle Hardware that manages the Furniture Palace Eldoret notes that it serves as a one stop shop, where a client gets all they need for their homes or offices. Some of the clients include IT experts, architects, advocates, medics and decor specialists among others.
"Some of our clients studied abroad and want to have similar items and designs in their homes. Social media has changed how people shop, they just click and look for what they want," he explains, adding that they also "have a one of a kind of computerised paint mixer that allows a customer to get a desired colour".
December is their peak season with the space serving over 200 customers in a day. In other months, he says they serve between 100 and 150 customers in a day.
Mr Patel explains that they serve the Western and North Rift region markets such as Kisumu, Kakamega, Nandi, Baringo, Bungoma, West Pokot and even Turkana.
"December is our peak season. This time, we get many clients who stay in the cities coming to renovate their homes. Some are also involved in construction of homes," he says.
Here, a bed goes for a high as Sh550,000 and a sofa set can cost as much as Sh1 million. Their most expensive coffee table costs Sh300,000.
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Source markets
Ms Celine Mulongo, head of furniture section at Furniture Place Eldoret says all their products are shippedTurkey, Britain, Malaysia, China and India Turkey, Britain, Malaysia, China and India.
"Our clients are hotels, homes, institutions and even organisations. However, homes and hotels constitute about 70 percent of our market base," she notes.
At CTM Eldoret, Sheila Letting, the store manager, says that they serve Eldoret, Bungoma, Lodwar, and western markets. CTM has eight stores in Kenya; two in Nairobi, Thika, Kisumu, Diani, and Mombasa and 78 stores in South Africa and other African markets.
CTM Kenya director Carlo Vitulli says they saw a gap in the market and seized the opportunity.
"Eldoret is not the same as it was 30 years ago. Today, it is a different market as we have more industries as well as the farming communities that are driving the local economy. Due to increasing population and growing demand for the middle and premium items, we set this store to serve these clients,” he observes.
According to Ms Letting, the most premium items are shipped from Italy, Spain, Turkey, South Africa, and Thailand. There are also adhesives for tiling.
“We offer unique, modern and trendy items so that clients in Eldoret don’t have to travel to Nairobi or abroad to bring them,” she says.
“Eldoret’s market was hungry for trendy and unique products. Most people used to travel all the way to Nairobi or Dubai for these products."
CTM Eldoret store manager Sheila Letting.
At the stores, they stock porcelain and ceramic tiles whose prices are influenced by their quality, durability and appearances. For instance, the price of tiles varies depending on whether they are used to put up homes or big projects such as hotels, supermarkets or malls.
“The tiles that one uses to furnish your home are not the same as the ones you put in hotels or malls because the wear and tear is not the same. For instance, at a hotel you get 50 people in a day but that is not the same for a home which has five people,” she explains.
The prices of the tiles range from Sh700 to Sh5,000 per square metre.
The store serves North and South Rift and parts of western region like Bungoma. Some clients come from all the way from Lodwar or West Pokot.
“We get most clients during holidays. As you know this region, we also have many social events like weddings when home owners want to furnish their homes . . . we also have many real estate projects coming up,” she adds.
Growing demand
Another firm, HEET Suppliers – Hardware and Tile centre in Eldoret, a family business, is cashing on the growing demand for interior décor items and services in the region.
It stocks a wide range of lighting options from chandeliers, wall lights, ceiling lights, light bulbs, to outdoor light fixtures.
Then there are also bathroom accessories such as wash basins, towel holders, taps, showers, toilets and mirrors. Tiles from wall tiles, floor tiles, mosaic, PVC tiles and staircase tiles as well as the wall paints and floor paints and gypsum.
In March, 2017, the accessibility, competition and potential for growth drove Mr Hitesh Sumreeyasah, the owner, to venture into this business.
“It is normally the same throughout the year, but we are busiest in November and December. We have been in this business for over six years now which allows us to predict the busy periods,” Falguni Bhavya Shah, general manager of the firm says.
“Many of the home owners, contractors and foremen used to travel to Nairobi to bring in unique finishing products for their projects. My ideas were to bring in convenience, efficiency and growth in Eldoret town,” notes Ms Shah.
Gradual growth
But it took some time before the business got traction.
“When we opened, friends and family would question how we would manage to operate a hardware store outside of the CBD... we still went ahead to open the hardware store and for six months nobody knew we were operating. As time went by because of our diverse variety and excellent sales services we experienced gradual growth every quarter,” she recalls.
She says they stock all products ranging from affordable, medium and high end, "as we focus on quality. "Most of the taps range from Sh650 to over Sh20,000.
Shivani Veer Shah, operations manager, observes that many things including advances in fashion trends, technology, other innovations, available materials, the economy, and lifestyle changes are influencing interior décor in the market.
“We also have instant feedback on design decisions via social media, mostly on Instagram, that is impacting style,” explains Ms Shivani, also a trained interior designer.
However, since most of the items are imported, tax imposed on the products also ends up pushing up the cost of the interior décor items.
Tax hurdle
Ms Shah explains that since these taxes are based on the foreign currency, especially the dollar, ‘any variation in the dollar tends to determine the new prices that are charged on our products. We do have regular updates from our suppliers who then increase prices accordingly.’
“Tax on imports affects our business in a way. With the increase in duties of various products, we are usually compelled to increase our prices of the commodities and the high price is borne by the final consumer who can at times get discouraged opting for budget friendly options,” she observes.
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This article was first published in the Business Daily.
