Traditional paper books still king in Kenya, but probably not for long

Kenya’s educational publishing industry has grown tremendously in the last decade. But should book stores be worried of the wave of digital publishing that has seen global book retailing giants like Borders Group go into liquidation? How we made it in Africa’s Dinfin Mulupi caught up with Text Book Centre director Sarit Shah, to find out how e-books pose a threat to its business. Shah, whose family has interests in many other ventures including Nairobi’s Sarit Centre shopping mall and a local bank, also revealed the secrets behind the success of the Kenyan Asian community in business.

A Text Book Centre outlet in Nairobi

A Text Book Centre outlet in Nairobi

Tell us a bit about the Text Book Centre.

The business was founded in 1964, and has grown since to have six retail branches in Kenya in addition to a wholesale division. We will be opening another branch in March along the newly commissioned Thika highway. We opened in Uganda three years ago, but realised we were in the wrong location and hence we had to close down the business after two years. Our current strategy is to cover Nairobi before pursuing regional expansion.

Globally, many book stores have closed down because of the popularity of digital books. Are you seeing any effects of e-books on your business yet?

We believe we still have a few years before the same fate hits this place. Publishers are not ready to go full throttle into digital books because the majority of the books that sell in Kenya are text books and most schools do not have the infrastructure like tabs, internet and electricity and cannot afford using digital books for learning. Having said that, e-books present a major threat since it allows buyers to go directly to publishers and cut off the book stores from the chain of supply. We are projecting in about three years the popularity of digital books will have grown to the level of upsetting book shops. We are working with Kenya’s first e-book store eKitabu on pilot projects to cushion ourselves and prepare for slow purchases of paper books.

Describe some of the challenges of running this business.

We have grown in terms of turnover, but there is more competition today, which is reducing our margins given the fixed costs we have to meet. This keeps us on our toes and we have to be even more innovative. Text Book Centre was run by the family until five years ago when we decided to have professionals run the business. As the business expands and you need more employees, human resources becomes a challenge. Finding the right people for the job as well as retaining talent is a challenge.

What are your future plans for the business?

We are working in developing a mobile app that will enable customers to buy books via their mobile phones. We want to give customers more efficient options and better services. We plan to have a physical presence in all 47 counties in Kenya as well as expand to neighbouring East African countries. We are also working on a vibrant e-commerce business through our website that will allow customers to buy books from the website and have them delivered at their homes or offices.

Your family is involved in many other ventures. What are the secrets to your achievements?

I think it is because of the vision, diligence, business sense and the dedication to make it work as well as God’s grace. In a family business, when roles are not laid out correctly and there is no formal organisational structure, non-business issues slow down growth and development. In many family businesses every family member is the boss. It is important to clearly lay down the structures, procedures and policies on governance. To continue growing, attract the next generation of family members in the business and prepare for the current generation who wants to retire in the near future, it was necessary to start running the business professionally.

What opportunities are you currently seeing in Kenya?

Everyone is eyeing Africa and Kenya has a lot of opportunities in gas, oil, retail business, manufacturing and real estate, especially with the demand for homes, commercial space and shopping malls. The middle class is growing and it has a higher purchasing power, which brings growth to very many sectors. Because of the elections, people have a ‘wait and see’ attitude which makes the business [environment] volatile. We expect the business environment to improve after the elections.

The Kenyan Asian community has been very successful in business. Share with us the reasons behind this success.

It is the dedication and commitment. If you want to achieve something you need to have the drive, which I think has been key to our success. We are all equal, but I think the success has to do with certain attributes which could be in anyone. There are natural born entrepreneurs, who have an appetite for taking risks. I think visionary entrepreneurs have in common the drive to succeed, dedication, business sense and sometimes a bit of luck.