Our prices are just overhyped, says China Square owner

China Square

China Square Ltd Director Cheng Lei appearing before National Assembly Committee on Trade, Industry and Cooperatives at Ole Sereni Hotel, Nairobi, on March 14, 2023.

Photo credit: Lucy Wanjiru | Nation Media Group

What you need to know:

  • Mr Lei said China Square started operating in Kenya in January after registering in 2022.
  • He noted that other than creating employment for to150 Kenyans, China Square has also paid taxes to KRA.

China Square Director Lei Cheng has refuted claims of sabotaging local traders by selling goods at throw-away prices. 

Appearing before the National Assembly Committee on Trade, Industry and Cooperatives yesterday, Mr Lei who is popularly known as Charlie, said his intention is to make goods affordable to common mwananchi.

“We have no intention of driving anyone out of the business, we can coexist. We are not underpricing, our prices are not lower than those offered in Eastleigh and Kamukunji markets,” said Mr Lei.

He added: “We just offer competitive pricing to help common mwananchi access goods at affordable prices. We believe in making life affordable to citizens. We want to lower the cost of living down to consumers.”  

Through his lawyer, Thomas Letangule, Mr Lei said China Square started operating in Kenya in January after registering in 2022.

 He noted that other than creating employment for to150 Kenyans, the retail shop has also contributed to tax revenue.

Since it began its operation in Kenya less than three months ago, the retail shop worth Sh500 million has contributed Sh100 million in tax revenue to the Kenya Revenue Authority, the Trade Committee heard.

Kenyatta University building

On the contentious lease issue of its business premises at the Kenyatta University building, Mr Lei said the building had remained unoccupied for seven years before China Square showed up.

 “When we conducted our market survey in Kenya in 2016 and noticed that retail products were highly priced. We established a market niche. Because we did not want conflict with local traders, we chose an area outside the city. The building had not been occupied for years before we rented it,” he said.

He said the company imports goods from China and Turkey besides sourcing products from local manufacturers who make up 30 per cent of their suppliers.

He appealed to the National Assembly to intervene to help end the brewing animosity from local traders.

“China Square has a bigger retail shop in South Africa that stocks similar products and there have never been complaints against it. We have all the relevant licences including a six-year lease agreement with Kenyatta University,” he said.

However, a section of legislators led by Starehe MP Amos Mwago and his Gichugu counterpart Mr Robert Gichimu have demanded the closure of China Square. They argued that the business is yet to fully comply with some regulatory requirements.

The legislators gave Mr Lei seven days to present all the regulatory documents after it emerged that China Square is yet to register with the Kenya Investment Authority and the Chinese Chamber of Commerce.

The Committee Chairperson, Embakasi North MP James Mwangi, has, however, stated that the Chinese national, like any other foreign investor in Kenya, should be protected since he is operating his business legally in Kenya. 

Retail business

 He said that no law bars foreigners from setting up retail businesses in Kenya.

 “As a country, we have a duty to protect local traders. Likewise, any other person who is a citizen by birth or any other version is most welcome and has equal rights to be protected. We cannot demonise the Chinese and fail to touch Indians or any other foreign investor who does the same retail business,” said Mr Mwangi.

“Our business first is to protect local people because this is their home. Secondly, we also need to protect foreign investors because we also need them,” he added.

 The legislators have called for the alignment of business regulations in order to demarcate areas reserved for locals and those for foreigners.

 “We must align ourselves in our trade regulations. We can allow investors to do manufacturing all the way to the dealership as Kenyans take up retail businesses,” he said.