This is the third in the series of posts detailing the trends and common threads that I’ve learnt through interviewing a wide range of businesses operating in East Africa.
The East Africa Business Podcast is the weekly podcast that has been running for the past six months. Right now we’re on episode 33 with more on the way, and so if you’re interested in hearing new episodes and checking out the archive, then hit Subscribe wherever you get your podcasts.
The post this week is looking at physical goods.
Physical goods in general
From the last post exploring the digital goods and services in the region, this post jumps back into the physical world, with products that the East African consumer is buying on a day to day basis.
In all of the four countries I visited (though especially in Kenya) there is “an emerging middle class” that looks to spend disposable income on physical goods to improve their quality of life.
The four episodes featured in this post are nicely coupled together (make up and fashion, and then tea and cake) with a common thread amongst all being how the businesses are sustained by demand by local consumers, rather than being reliant on external funding or foreign patronage.
For now though, let’s get started on an area where I had close to zero prior knowledge of the product in question: make up
“Western-made products can be incompatible”
Customers have a strong personal and emotional connection with products such as make up, and when looking at the options available to her, Sylvia felt a disconnect with glossy offerings for a light complexion, and couldn’t trust anything “Made in China”.
Out of this she took her work as make up artist and began developing a range of cosmetic products with the African female in focus.
We also speak about how her studio sometimes feels like a therapist’s office and plans to take Paramour Cosmetics over to the States, and selling on Amazon.
You can listen to the full episode here:
“More clothes will be made in East Africa”
Though Gloria and I began our talking about Kampala Fashion Week (the Ugandan equivalent to London, Paris and New York) the conversation turned to how clothes are designed and made in the country.
One of the discussions coming in at a government level is to reject bundles of second hand clothes being shipped in from abroad, and instead look to develop a local tailoring industry who can find more space for their goods to be sold.
Gloria and I discuss the creative side to businesses operating in Uganda, as well as the logistics of organising an international event with an African twist.
You can listen to the full episode here:
“Tea is drunk differently”
In the episode I did with Toby from Chai Tausi we went into how tea in Tanzania is produced and sold around the region.
Interestingly, the product he was selling was seen less of a luxury, and instead was mass market for the wider Tanzanian population. As a result, tea was sold in small packets of loose leaves (rather than a bag) and boiled up in a big sugary pot to be eaten with bread for breakfast.
We spoke about factors which affect sales, with Toby noting how the weather and the price of sugar affect the quantity of tea that is bought, but also how people often have a choice between phone credit and Chai Tausi, meaning they need to stay competitive.
You can listen to the full episode here:
“People will spend hundreds of dollars on cake”
The final product to mention is the sweet treats of cake.
It’s a pretty popular industry. I was recently at a BBQ and at least four of the Kenyan men identified their wives as making and selling cakes, before looking disparagingly down at their waistlines…
Grace speaks about how she started selling cakes and now runs a “Cake Academy” to train others to start their own. Instagram is one of their primary marketing channels, and with her main customer being upper middle class she noted how for some special occasions people will spent $100+ on one of their intricate bespoke cakes.
The other growth area is cupcakes and conducting the interview from their flagship shop, I of course, I had to sample what was on offer (and yes they were dead tasty).
You can listen to the full episode here:
Conclusion
One of the main surprises I had travelling through East Africa was the levels of money being spent by local consumers.
Admittedly my time was centred on the capital cities where the concentration of wealth is produced and spent, but nevertheless, malls, roadside shops, and conversations with people all demonstrated how there is money comfortably being spent on goods you would probably consider “non-essential”.
I won’t go into the second order effects of how this is contributing to rising inequality in these countries, but instead merely comment that when a significant portion of your population is willing and able to spend on discretionary items, it opens the opportunities for businesses enter the marketplace to vie for those purchases.
This again, to me at least, indicates how opportunities are present for more businesses to prosper in the region.