Kenya’s capital Nairobi has become one of Africa’s hot spots for shopping mall developments. Earlier this year The Hub Karen retail centre opened in the wealthy Karen suburb – named after Karen Blixen, the Danish author of the colonial memoir Out of Africa. Although it is home to some of Nairobi’s wealthiest, the suburb had a shortage of formal retail space.
The Hub Karen’s manager, Jonathan Yach, explains why there is still space for more such shopping centres in Nairobi, despite recent talks of a glut – and how developing local fashion will impact formal retail. Below are edited excerpts.
What are some of the things you’ve learnt since The Hub Karen opened its doors?
When we opened in February we only had 14 tenants. Today we are up to 54. Even though our anchor tenant Carrefour (the French retailer) isn’t open yet, there have been many interesting touch points for customers to engage in.
We have interviewed over 900 customers so far to understand the mall’s basic demographic. We were looking at things like age, gender, ethnography, how far they live from the mall, how long it takes them to get here, what shops they want to see and what they think about the mall. We have received very interesting input.
Most of our shoppers are aged below 35, they are predominantly women, and over 70% of our customers are employed – with a further 25% being self-employed. It is remarkable to see that 37% of our population across the entire survey has been Kenyan Africans, followed by Asian Muslims, followed by caucasians (both tourists and locals).
This information is absolutely critical because if as a food retailer you know the proportion of Asian Muslims, it means you are able to offer them appropriate halal food. We give these research findings free of charge to all of our retailers. Those who pay attention to the research will make a fortune because they will have an advanced, in-depth understanding of their customers.
Some stakeholders have recently suggested that Nairobi has too many modern shopping malls. What is your view?
I think that it is a wrongful proposition that we have too many malls. Whoever wrote that doesn’t understand retail. All you need to do is take a map of Nairobi and you analyse the primary catchment for each area very carefully. I can identify maybe eight or nine malls that would be very successful from the moment they open.
It is also about being relevant and catering for all your clientele in all the different shades. If this mall was in South C or South B (middle-class residential estates in Nairobi) we would have 10 nyama choma (barbecued meat) shops – and if we had a pasta shop there it would be dead. In a mall like this (The Hub Karen) we don’t have a nyama choma shop but we have a Carnivore restaurant (a high-end meat eatery). Research-led decision-making makes a better piece of real estate and makes a much better experience for customers.
What would you like see change in Kenya’s retail industry?
We are confronted with a vicious reality in East Africa that is mitumba (second-hand clothes). Mitumba has contaminated mainstream fashion retail. In other malls internationally, 70% of the tenant mix is fashion and this is not accessories or shoes, I am talking about clothing shops.
In Kenya, it is the other way round. You go to any mall, and only about 30% of the tenant mix is fashion. We have 32,000m2 – and in our mix the proportion of fashion and accessories is just 30%, yet growing. Therein is the fundamental flaw, we don’t have enough fashion stores.
This shows fundamental weaknesses because consumers, in their DNA, since the 1970s have found it acceptable to buy mitumba and don’t see why they should go to a shopping mall to buy clothes. We are looking at encouraging young designer fashion at The Hub. We are developing a permanent store where young Kenyan designers can showcase their fashion at very low rental.
If we can’t beat mitumba, then we have to understand it, and work with it. We want to see if we can bring a concept of mitumba-like retail into this environment. About 25 years ago I was involved in opening the first Young Designers Emporium (YDE) store at a mall in South Africa on a 400m2 footprint. Since then YDE has proliferated and Truworths International acquired a majority stake in YDE. We can do the same here – get young local fashion designers out of the garage and into major shopping malls.