The ones that made it
PHOTO | DIANA NGILA | FILE The Old Mutual Building along Kimathi Street.
Not all South African companies coming into Kenya have performed poorly. Some firms have operated in the country for decades successfully.
Old Mutual is probably the oldest of those. Established in the 1800s in South Africa, the company set up operations in Kenya in the 1920s.
The savings and investment firm has experienced first-hand the early-bird advantages for companies investing in yet-to-mature sectors.
“Companies that came into financial services before the market really grew have done well,” said PwC partner Benson Okundi.
Multichoice, a South African firm in the pay television business, was also a beneficiary of this advantage. The pay television market is only growing more sophisticated now with digital migration and the company is finding a need to adjust.
The Debonairs and Steers franchise, held locally by Hoggers Ltd, has also grown to be a mainstay of Kenya’s fast-food restaurant scene. The company has, however, faced challenges as it tries to maintain the same standards at over 500 Steers and 350 Debonairs franchises across the world.
The South African fast-food competitor, Nandos did make a brief foray into the Kenyan market, only to exit the market when the going got tough.
Another South African franchise, Woolworths, was successfully operated in the Kenyan market by local company Deacons. Woolworths last year decided that it wanted direct presence in the Kenyan market. The company has settled for the creation of a new company in partnership with Deacons that will own and operate the brand in Kenya.
Beginning 2014, Woolworths will face competition from luxury retailers Edgars and Foschini as they open their first stores in Kenya at the Garden City Mall on Thika Road.
These retailers will try to create a niche for themselves in a market dominated by local retailers such as Nakumatt.
In e-commerce, several South African companies have come into the Kenyan market only to exit. Mocality was the latest to call it quits earlier this year, claiming low revenues due to an inappropriate business model.
