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A Michael Kors watch.
|Life & Style
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Luxury brands race to open stores in Kenya, but who is buying?
What you need to know:
- Brands such as Adidas, Puma, Aldo and Michael Kors have opened stores in Nairobi this year, with plans to expand to Mombasa, Kisumu and Eldoret.
The demand for expensive shoes, clothes, handbags, jewellery and watches in Kenya may have slowed as purchasing power has fallen, but more luxury stores are opening in Nairobi.
But who is buying these big-ticket items?
Brands such as Adidas, Puma, Aldo and Michael Kors have opened stores in Nairobi this year, with plans to expand to Mombasa, Kisumu and Eldoret.
Karim Montasser, the country manager for Adidas and Puma, says the sports lifestyle is growing in Nairobi, and with it the demand for style dedicated to the gym, running or golf.
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Theodoraa handbag at the Aldo shop in Westgate Mall.
There also seems to be a resilient appetite for luxury among the affluent, even as disposable income among the middle class dwindles, forcing them to cut back on luxury.
"The stores not only serve Kenyans but also Nigerians, Congolese, Sudanese, Tanzanians, and Rwandese who come to Kenya to do their shopping in Nairobi since some of these brands are not found in their countries,” says Mr Montasser.
Most of these luxury stores are now opening mono-brand stores (a store that sells only clothes, accessories and products of a particular brand), targeting well-heeled shoppers who prefer specific brands, as opposed to walking into a multi-brand store that stocks different brands of clothes and accessories.
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Aldo Hairetrem Men's Green Watch at the Westgate Mall.
Mr Montasser says plans to open Adidas and Puma stores in Kenya were halted after events such as the Covid-19 pandemic, the lockdown and the 2022 general elections made it difficult for RA Sports, the Egyptian sports retailer, to proceed with its plan after opening the first Puma store in Westgate Mall in June 2021.
“We started our comeback in 2022 to get back on track with our expansion plan in Kenya. We needed to find another location further from our first store to serve more clients. We chose the Hub in Karen where several international brands have also set up shop. We opened Adidas in July this year. Then, Puma opened earlier this month,” he says.
The sports retailer plans to open another store in Mombasa's City Mall in December. Montasser says the biggest challenge is finding the right location as not many luxury brands have expanded outside Nairobi.
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Karim Montasser, Country Operations Manager Adidas, Puma Kenya pictured holding the Puma Xetic Sculpt sneaker on September 21, 2023 at The Hub, Karen.
In terms of pricing, the most expensive Adidas shoe sold in the Kenyan market is the Y-3 Rivalry, which goes for Sh74,900. In US stores, the same shoes go for Sh59,384 ($400), which is the price before shipping and taxes. The price difference has raised questions among Kenyans who want to buy the shoes but find them too expensive and prefer to buy them when they travel to cities like Dubai.
“It is unfair to compare Kenya to South Africa, the UK or Dubai. There is a big difference in the taxes that have to be paid here as compared to other countries. In Dubai, the value-added tax is five percent. In Kenya, it is 16 percent and they are about to increase it to 18 percent. Even if you buy the shoes in Dubai and travel back to Kenya, you will still have to pay customs duty at the airport on arrival,” notes Mr Montasser.
He adds that transport and shipping costs have also gone up, which also affects the price of the items.
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Puma Lex Wmns Sneaker.
“The downside of buying an item from an Adidas or Puma shop outside Kenya is that you cannot return, exchange it, or have the item repaired if it gets damaged. The collections may also vary in different stores in different countries, so it is possible to not get the same item here if you need it to be fixed,” he adds.
Unfortunately, second-hand shops and mitumba markets such as Toi Market in Nairobi's Kibera serve an almost similar need, especially among the impressionable middle-class youth who want the same luxury branded shoe, even if it is second-hand.
There is also the challenge of the influx of counterfeit Adidas and Puma products, which are much cheaper than the real thing. Mr Montasser admits that this problem requires the government to make it easier for the original luxury retailers to bring in their designer shoes by reducing the taxes that make the shoes expensive. Otherwise, most shoppers would opt for the cheaper, fake shoes rather than buy the real thing from the shops.
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Sportswear at the Puma store, The Hub, Karen.
Aldo is another luxury brand with big expansion plans, having opened two stores in Nairobi this year. A Libyan retail company called WAMA International identified Kenya as a potential market, according to its head of retail, Ismael El Mahdy.
“We noticed that Aldo is a well-known brand in Kenya especially at the launch of the first store in Sarit Centre in April. Kenyans who came to the shop already wear Aldo shoes and carry handbags. They know the brand even better than us. This is why we have decided to open four stores by the end of the year. Our target market is people who love to follow the latest fashion trends, especially women,” he says.
Mr El Mahdy adds that 60 per cent of their sales come from the women's section, which consists of handbags, shoes and jewellery. Handbags priced from Sh15,000 sold out in the first few weeks after the first store opened in Sarit Centre. The last Aldo store to open was at Westgate Mall in August. The next will open at the Hub in Karen in October and the fourth at Yaya Centre in Kilimani.
“Aldo is not a cheap brand but the price range in Kenya is cheaper than Turkey and roughly the same in Egypt. So there is no need to travel to buy our merchandise since we also stock the same collections. Tourists from West Africa, Congo and Sudan also love to shop in Nairobi since there are no Aldo shops in their countries except in Nigeria. Seventy percent of our customers are Kenyans who are repeat customers. They come by once a week to check out new stock,” says Mr El Mahdy.
The latest luxury brand to make its debut in the Kenyan market is Michael Kors through an authorised retailer, Milano Fashion Street, which opened its doors at Sarit Centre on September 29. Michael Kors is known for producing high quality watches, handbags and shoes, especially for women.
One of the directors, Raj Rashiyani, says people in Nairobi have the potential to buy luxury goods. Although his target market is the upper middle class, he believes their prices are quite low compared to other countries. Pricing is part of his strategy to build the market in Kenya and encourage people to buy from here.
“A Michael Kors handbag that we are selling in Kenya for Sh50,000 will go for $550 (Sh81,653) in India and $600 (Sh89,010) in Dubai,” he says.
The shop has been open for less than 30 days and Mr Rashiyani says they are getting 15 to 20 enquiries a day. However, there were no sales in the last four days before the official opening of the store, which was graced by several fashion influencers. Mr Rashiyani says influencers play an important role in influencing people to buy.
“We are selling original items at a good price, yet there are other shops that are selling knock-offs at Sh60,000 and people are buying [them]. If I am selling the original at the same price, I am sure they will come and buy. Our bags still have the codes on them so you can scan and see that the bag is real,” he says, adding "luxury brands can survive in Kenya if the price is reasonable."