Kenyan entrepreneur Navalayo Osembi-Ombati co-founded footwear company Enda in 2016 with the dream of building on the country’s heritage as the home of great runners like Eliud Kipchoge and Wilson Kipsang. The vision was to manufacture high-quality running shoes in Kenya.
The production of the company’s first product, the Iten running shoe, was made possible through a crowdfunding campaign. Recently, Enda raised $1.1 million in a funding round led by US-based impact investment firm Talantron.
We previously interviewed Osembi-Ombati in 2018 for our book project – HOW WE MADE IT IN AFRICA: THE BOOK – which tells the stories of 25 entrepreneurs who’ve built thriving businesses in Africa. Jeanette Clark caught up with her to talk about the last three years and the growth the company has experienced.
Summarise the last three years for us.
We have seen significant growth in company revenue – triple-digit growth. We have also launched two new products: one, a sneaker named Mwanzo, and the other, a trail running shoe called the Koobi Fora.
Right now, we are considering what it means for us to go global and leverage on international supply chains.
In 2018, most of the manufactured components of the Iten shoe were produced in China and assembled in Kenya. Have you moved more of your manufacturing locally?
Our brand has been heavily influenced by the Kenyan production story and the impact we want to make locally. However, we have always wanted to create an international company and the feedback we get from our investors is that we need to leverage the global supply chain.
We are working on finding the balance. We are reaching out to manufacturers in Africa but it’s not that easy to find the right capacity and expertise to produce our shoes. We are talking to companies in Ghana, Namibia and South Africa, but the search has raised some questions: do we want to be niche and focused on manufacturing in Africa, or do we want to be part of the global supply chain? And what would this mean for our brand?
I would love to say that we’ve resolved this but we haven’t. We are still in the process of figuring out what is best to grow the brand and create the impact we set out to, which was to improve the share of benefit Kenya gets from its reputation in running.
For the Iten (a longer-distance running shoe), the majority of the components are still sourced abroad. Although, we have managed to push local content up to 80% for the lifestyle sneaker.
How global is your team?
We have pockets of expertise in many places, but we are still committed to making Kenya the place from which we operate; the main team is based in Nairobi. We do work with independent contractors who help with our design but we also have a local designer in Kenya in order to build local capacity.
We work with a manufacturing team based here, and a team in China.
Talk us through Enda’s products.
Our previous line-up had the longer-distance shoe (Iten) and the daily training shoe (Lapatet). We have now added the trail running shoe (Koobi Fora).
We also realised there is a lot of opportunity in the sneaker market and our sneakers will enable us to build local capacity as its design and components are conducive to local manufacturing.
You mentioned back in 2018 that international logistics make exporting complicated. Has this improved?
Unfortunately, the whole world is experiencing a logistics crisis because of the pandemic and I believe it is going to remain challenging for some time. We have therefore decided to focus on Kenya and the US in terms of providing end-to-end fulfilment. A third-party logistics company is assisting us in the US.
We’re still trying to figure out Europe as it’s not that easy to set up from a regulatory perspective. But we continue to ship to customers worldwide from the Kenyan office.
We have to be strategic about the countries in which we set up registered entities. Only once we see potential and growth in demand, will we invest accordingly.
With your rapid growth, what are some of the challenges that have cropped up?
Working capital is always a challenge. We try to predict future sales but if we make the wrong decision, we may end up pumping money into a product that sold fast for a specific reason, but won’t necessarily show sustained growth. Demand forecasting is difficult and on top of that, we have these uncertainties in terms of the global supply chain.
Also, costs have increased significantly – from transport to raw materials – over the last year or so. Some of the input materials have literally doubled in cost.
We must develop local capacity as one way to address these inflationary pressures. The sneaker that we have developed is almost 50% less in terms of input cost because of where we source the raw materials; they don’t have to be imported and we don’t have to pay customs duties. This is why we are so passionate about developing the sneaker line as it brings us closer, from a price point perspective, to our customers.
How has Covid-19 affected your sales?
Positively, actually. During Covid-19, gyms were shut down and people needed to find something to do. Running is an activity people can do alone.
As a result, the running shoe industry, across the board, really picked up because of the pandemic and this was positive for our sales.