Trade with China gets personal

Kenyan entrepreneurs were eager to take a firsthand look at new products during a China expo in Nairobi

As the last day of the China Trade Week drew to a close in Nairobi, visitors surged in before the doors closed at 4 pm to make quick bargains and secure contacts.

Bargaining had started in earnest at noon among customers who had determined they were satisfied with a particular product's quality and usability. Exhibitors soon ran out of business cards and opted to write down the names of prospective partners.

Made-in-China solar lamps, wigs and steam irons were among the items generating lots of interest at the July 1-3 event at the Kenyatta International Convention Center. The event attracted 150 Chinese exhibitors and more than 10,000 visitors, organizers say.

Samwel Nyagudi, an electrical instructor at Kisumu Rotary Youth Training College in western Kenya, traveled overnight to visit the fair. He was interested in green energy products, whose use is growing in his hometown.

He was not disappointed. "The exhibition has a wide variety, and I have also seen innovations that are yet to reach this market," says Nyagudi, who often attends workshops held by development partners keen on increasing the use of new technology in rural Kenya. "I have learned a lot."

However, he is more excited about the bargains he made. "The price was very affordable," he says, pointing at the converter and two solar streetlights with LED. "I have saved on what I could have originally spent." He also bought a solar panel.

Nyagudi says although Kisumu is a growing city, the product range is limited and found in few shops. "I want to be an agent, too. I have exchanged my contacts with various traders and we have agreed to further our communication."

Mark Hu, regional director of Choice International from Guangzhou, Guangdong province, a company specializing in Lontor branded solar lamps, says he had sold some 14 of the total 18 cartons he had shipped into the country. Each carton holds 30 items. "Our prices are competitive and quality unrivalled," he states.

The company wants to establish its presence in Kenya. "We already have a market in Nigeria with 90 percent market share and a branch in neighboring Tanzania. Kenya is an attractive market and that is why I am here," he says.

"I have established good contacts in the last three days and I hope to pursue them. It will be easy because I am based in the region and this market is still open."

The Chinese company is ready to back the marketing expenses an agent incurs to introduce the product, he says, as long as the entrepreneur owns a shop and will be importing directly from China.

His buoyancy is shared by Emma Ran, export department deputy general manager for Sino Capital Crown Beijing Steel Co Ltd. They are in Kenya looking for distributors and agents for their steel products. "We want an entrepreneur who owns a warehouse and can import at least 200 metric tons," she states.

"We have a big market in Tanzania and Mozambique through our European distributors."

Despite Kenya continuing to be attractive, Ran said market penetration is difficult because it has been hard to find a reliable local agent.

Michael Munyao, chairman of China-Africa Friendship Association Kenya Chapter, a group that promotes trade between Kenyan and Chinese entrepreneurs, says this is a difficulty that can crop up in any society.

"Entrepreneurs from both sides have to carry out due diligence before engaging in any business," says Munyao, an entrepreneur whose businesses mainly relies on Chinese imports.

He says that although in the recent past the association has not received any reports about business going sour between a local and Chinese trader, the association is ready to investigate local requests about the legitimacy of any Chinese business.

"Once a Chinese company name is forwarded to us, we liaise with the Chinese embassy here and the Chinese local government authorities with whom we have partnerships to establish crucial information about the credibility of the company."

Chinese businesses, he says, should do the same. "We have furnished information about local establishments such as registration, tax compliance status and even board members," Munyao says. There is no charge for the checks.

Complaints about the quality of Chinese products had been an issue in the past. However, he says, Kenyan consumers are becoming aware that the problems have originated with unscrupulous local traders who are out to make a quick buck selling subpar products.

"Kenyan entrepreneurs should extend their inquiries to know if the products they are interested in are certified by the Chinese government," Munyao says.

Once satisfied, a proper partnership agreement should be drawn up in which both parties agree to the terms.

Most of the Chinese traders require their Kenyan counterparts to have existing businesses. But as business grows, some entrepreneurs find themselves short of capital for expansion.

But Munyao says this should not interrupt a business relationship because Chinese entrepreneurs are flexible. "Once they establish your credibility and honesty, they may extend credit facilities. The Chinese are smart and would not lose such an avenue," says Munyao.

He says Kenya is a landing pad not only for the Asian business community but also Western multinationals. Therefore, competition is stiff.

"Kenya is an experimental market that tests the resilience of foreign businesses in Africa. Once you are successful in Kenya, you immediately and easily penetrate the eastern and central region and extend toward the greater south and west Africa."

Munyao says his business recently imported TV set-top boxes to meet the growing demand for electronic gadgets as Africa switches from analog to digital. However, controversy regarding the awarding of broadcasting tenders delayed the rollout in Kenya and this significantly watered down the market demand.

But Uganda and Tanzania successfully negotiated the change. "We moved our products to these markets and sold about 90 percent of the set-top boxes in Uganda alone. It is not a huge market, but we did not lose," he says.

He praised the market reforms the Kenyan government has been implementing. He noted, however, the local financial institutions need to provide affordable credit to boost the number of borrowers since many Kenyans are moving into entrepreneurship. "Bigger things are happening here," Munyao says.

His advice for exhibition organizers was that products such as consumer electronics, home electrical goods, green energy solutions and low-cost portable housing would be popular at future events.

There were few home electronics or computer accessories displayed at the exhibition. Gary Robinson, MIE Group's events director, says this event was a pilot project, and the next would be more structured to meet the demands of the Kenyan market. "I think we will plan for a China Trade Month in which each week will focus on specific industries such as construction, home electronics, green energy solutions and many more," Robinson says.

Crowds milled around booths selling home electronic goods. Buyers says they loved the multi-functionality of products such as blenders and simplicity of a portable steam iron.

Merrylight Wigs, a Chinese company specializing in women's hair extensions, sold all its products within two hours.

Local traders who did not find the exhibits they were looking for were able to turn to Made-in-China, a company specialized in matching buyers with Chinese suppliers. Cissy Wu, the manager, says it was their first time in Kenya, even though 10 percent of their online visitors are from Africa. "We hope to increase inquiries from Africa, especially in Kenya, where China is one of its biggest trading partners," Wu says.

Kenya Investment Authority and the Kenya National Chamber of Commerce and Industry were partners in the three-day event.

lucymorangi@chinadaily.com.cn

(China Daily Africa Weekly 07/10/2015 page15)