How e-commerce is saving small-scale traders from high rental costs in Nairobi

traffic motion in the city center of Nairobi, Kenya
traffic motion in the city center of Nairobi, Kenya

Today, Nairobi is ranked as one of the most expensive cities in the world appearing at position 97 according to 2019 Mercer Cost of Living report.

Rental accommodation which was found to be high is among other services that the survey by the global consulting leader in advancing health, wealth and careers used to determine the expensiveness of Nairobi and other cities worldwide.

It is this high cost of rentals in the capital city especially in the CBD that is forcing small-scale traders to think out of the box by considering e-commerce in place of rental shops.

Aerial 180 degree panorama of downtown Nairobi, Kenya and financial district.

Aerial 180 degree panorama of downtown Nairobi, Kenya and financial district.

“I know of my neighbours who were running a small jewellery shop who are now selling their goods online after packing out last year to operate from home,” said John Mungai who runs men’s cloth business along Tom Mboya Street in the CBD.

He says that most of the shops around charges up to Sh25,000 a month depending on the size and still the traders have to sort out the city council taxmen.

But how are these small-scale traders who have decided to go online operate their businesses and still make good profits?

You will realise that today there are many social media pages with advertisements of people selling goods and services. Most of them are individuals posting shoes, clothes, electronic accessories and cutleries among others.

According to Mungai who also leverage on the power of social media to reach his customers, most of the traders who operate from home post pictures and prices of whatever they sell online on Facebook, Twitter, Instagram or WhatsApp groups.

Online Payment.  female using smartphone and credit card

Online Payment. female using smartphone and credit card

These are then seen by both usual or prospective customers who then order and upon payment, home, and office deliveries are done either in person or through courier services especially for clients outside Nairobi.

In this, the traders are not only saving on rental fees but they have also cut on workers’ salary and county council remittances.

Other than social media which is the popular tool the traders are using to reach more customers and make sales, they are also counting on referrals by usual customers who recommend their good to prospective buyers.

“You see, while you operate in these shops there many people whom you come in contact with as the shops are frequented by many city visitors. Some who happen to interact with your goods or services, even if they do not buy, they may at some point recommend it to someone else,” said Mungai adding that that is the beauty of starting from somewhere.

According to Michael Owiti, Business Development Manager at TDS Marketers, an online marketing and web design service firm in Nairobi’s Westlands, eCommerce has given distressed small-scale traders a better business option.

“Before we could see many of them close shops and dispose of their goods at throw-away prices and vanish but today they have found a lifeline online,” he said.  

Furthermore, many entrepreneurs in Nairobi entering in the sales business for the first time have learned the trick and since they might not be having enough cash to set up big shops of cater for rent in the town, they directly opt for social media which has become a wide platform where they can reach many freely or just by spending some little money for product promotional.

No wonder you frequently come across the messages “please retweet, my next client could be on your timeline” on micro-blogging sites as Kenyans seek business.

Trust me, once such people find their footing in online business, certainly they will not go renting shops or go back there if they ever had one before.

Certainly, e-commerce is eating up the rental business slowly in the city.

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About Kuza Biashara

About Kuza Biashara

Starting a business is a leap of faith even in the best of circumstances. We at Kuza Biashara are focussed to encourage these daring small business owners who have the potential to innovate and change the world by contributing to the nation’s economy and livelihood.