Whats’s Next In Media?

A forum titled #whatsnextmedia was organized by Nest at the Aga Khan Graduate School of Media and Communications, in Nairobi yesterday. The first panel had Dennis Itumbi, Owaahh, Gaddo and Carole Kimutai. There was some nice chats about the current state of media, but it all came down to – what’s next in in media? WhatsNextMedia panel

Carole:

  •  Tuko produces viral content as Kenyans want short precise news delivered daily
  • They have to monetize continue – and they have just started to scratch the surface. Their sister site in Nigeria has 1 million views daily.
  • A new website has give answers, as there’s too much content out there. People check ma3route every day as it gives enables them to make  decisions like which road to drive on.
  • Legacy media need to understand their audiences.  Readers wants smarter delivery e.g. her Qz.com news app talks to her about the news they deliver.
  • Young people are less informed and can’t answer simple questions. They don’t read, but love gossip – and they now have a gossip page that is very popular.

Gaddo:  

  • As a cartoonist, he has benefited from the freedom of media and internet in Kenya
  • Buni (producers of the XYZ show) contracts state that media owners cannot interfere with  the program’s content.
  • He;s worried that our brains can only process 140 characters – and it takes a lot of expertise to do good, short content
  • We should discuss media ownership in Kenya. The media is owned by the political elite and crooked people.

Dennis: 

  • The Kenyan president has been an observer of his online accounts, but in the next financial year (from June 30, 2016), that will change and he will become more interactive on his personal (ukenyatta) and official (presidentke) accounts.
  • It’s been a struggle to upgrade, secure, and improve government websites (and emails) with limited budgets but that continues. More online interactions brings improvement of government services e.g. internships at NITA
  • He’s fought to get jobs for bloggers and digital strategists and there will be many more for independent-minded  bloggers who can articulate and sell the Jubilee government agenda
  • They have a digital verification hub at State House to confirm and respond to negative media stories.

Owaahh:  

  • Niches - there is no mainstream audience, you need to write for specific people
  • You can’t make content for revenue, and you don’t need 1 million readers. James Murua blog is very big in the literature community in Nigeria, even though not many Kenyans know it. And when you have a niche, you can monetize it.

Others :

  • ghlaflarization of media - other newspapers and media are adding more gossip content, and have click bait headlines to imitate Ghafla that gets 1-2 million visitors per month
  • There are about 8 million whatsapp users in Kenya – more than facebook &  twitter combined, and it’s a  powerful channel for exchange of information - CEO of @ongair

Secrets of a Farm Middle Man

 The middle-man* is widely derided, as one of many layers of between farmers and consumers, who squeeze the farmers prices lower, and increase the cost of foods to consumers. But what does a middle man-do, and why do they do it?

  • The money is insane. e.g. Middle-men get paid Kshs 50 per (90kg) sack of potatoes at the village, and others get Kshs per sack at the market. With every lorry having over 100 bags, a middle-man can make over Kshs 10,000/= per day just dealing at a market. But how much he /she has to share this cut, with others around the market system is another story.
  • Taxes: Cess/market fees are paid at the market of origin only. Along the highway, there are weigh-bridges,  but lorry with perishable items can’t afford to stay and queue while items go stale or rot. So they pay Kshs 2,000 per lorry to bypass the weigh-bridge, and they don’t have a cess receipt, its Kshs 1,000 to pass a police road block.
  • The farther the market is from the farm source, the bigger the profit for the transporter or middle man e.g transport all the way to Mombasa, or to Tanzania where a lot of Kenya produce ends up, and vice versa.
  • It does not tolerate strangers. A farmer can’t just drive up with his lorry, and expect buyers to embrace him/her. It can even be murderous.
  • It’s a relationship business. They have to network &  know where to find and sell produce and deliver on time.
  • Middle-men value and deliver on quality. If several lorries are waiting to clear at at a market, they can choose the ones with produce from a certain area that is desirable compared to that from others. Also lorries with produce from single farms are desirable over those collected from many different farmers or areas.
Middle men travel far to search for farm products.

Middle men travel far to search for farm products.

  • We are the reason they exist. Hotels and restaurants need food like chips every day of the year, regardless of where the potatoes come from. The middle-man economy ensures that this happens.
  • The business is hard work. The trades and operations are done very early in the morning, and end at about sunrise. This may tie in with the Equitel loans that start at 1 a.m. peak and are disburse by 5 a.m. before Equity Bank branches even open. When you visit a market in the day time, you see retail trade & prices, while the wholesale business has already been completed.
  • There is honor in this: Middle-men will  under-cut each over deals, but will not cross each other on payments, which they do  via mobile money or bank deposits.
  • When farmers talk to middle-men about the money they make, some immediately want to abandon farming, while forgetting that they have one resource that the middle-man doesn’t – their land.

Notes

  • * There are lots of women in the business – so middle man can also mean middle woman
  • $1 = Kshs 100

Farewell Naked Pizza

Today brought a series of tweets from the fabulous pizza chain, Naked Pizza Kenya that communicated their exit from the pizza business.

  • It’s with sadness that we closed for the final time yesterday & wanted to say a BIG THANKS to our fans, customers, suppliers & Tribe!
  • For 3 years, 6 months, 1 week & 4 days, we had the pleasure of serving over 200,000 pizzas and made more than 100,000 deliveries on time.
  • We’re incredibly touched by the kind words & memories so many of you are sharing about getting Naked*. Asante sana!
  • We’ll miss (most of) you, but all good things must come to an end! :-) And for the record, our operations are being taken over by Pizza Hut.

Ragin Cajun at Naked Pizza Kenya

This was bit of a shock, as Naked Pizza was one of my favorites pizza places in Nairobi. They had fresh pizza which you could taste all  real the ingredients and this was backed by  friendly staff and efficient service They employed a super delivery model that promised and delivered pizzas with a target of 15 minutes.

A glance at their witty twitter account showed a living breathing company in touch with its products, services, and most important, its customers. The tribe (staff) handling it were fluent in pizza, engaging in chats about their pizzas, delivery locations,  ingredients (pineapples from Thika), and health aspects (gluten & fat content, and suitability for people with diabetes). They also celebrated high-profile guests, deliveries to customer offices, and their vendors (kopokopo, safaricom etc.)

  • We don’t deliver to Gigiri – unless you work at the UN or US Embassy! We just can’t get to the rest of it in 15 minutes ( Jul 17, 2013
  • Today we start delivering to State House & Arboretum (in addition to the other areas we get people Naked*)! cc: @sunnysunwords (*Pizza) Aug 23, 2013

They also tweeted their challenges like when police arrested their delivery bike riders, when their  generator or phones lines failed, or when armed county health officers raided their restaurant a few weeks after they opened.

But clearly they had challenges, starting with their location. They had just one location in there first,  horribly situated in an office block with no parking, and far from any other mall. I’d often park at Sarit Center, have errands and meetings, then walk to Fedha Plaza, about 1/2 Km away as the building had no parking. They did well with the site and they later opened a restaurant at  Mombasa Road to serve the other side of town. While right from the start, they had demand from customers , near and far – with requests for pizza  from as far as Kiambu, and (the state of) Rongai, they never got to reach them. If a location did not fit their 15 minute radius, they turned down orders.

They also did not have the discounted or free pizzas that many Nairobians demand and which other chains do on some days (Terrific Tuesday, Pizza Friday), or evenings (happy hour).

When they raised their prices last October, I emailed Naked Pizza and Ritesh Doshi wrote back with some interesting insights about the evolving pizza market in Nairobi, one which he said bigger brands would survive. More on that later..

 

Kenya’s Money in the Past: Old Books

I came across some old books this weekend; One was a collection of speeches by former Central Bank Governor, Philip Ndegwa, and the other was a collection of contributions made by MP JM Kariuki in parliament.

Philip Ndegwa

  • The Central Bank devaluing of Kenya’s shilling is not a bad thing, and the economic impact of this is  widely misunderstood.
  • Commercial   banks should be innovative and do more for rural Kenya; not just mop up their deposits, which they then only lend to businesses in urban areas.
  • Kenya’s population will double every 17 years, if the current population growth rate remains at 4% a year (speech he gave at a population conference in Nairobi).

old local books

JM Kariuki

  • There is a shortage of land for housing, and the  government should take back all urban land that remains undeveloped for over two (2) years.
  • Why do government officers remove fences inside (colonial) farms that the government is buying to restore people? After this is done, the new owners will still have to go back and install new fences. Farms should be bought with the fence divisions intact.
  • While’ Kenya’s coin currency have the face of President Kenyatta, they should also inscribe his name around the sides so that future generations will know who the president was.

Nairobi Mall and Supermarket Moment

A research report by Knight Frank notes that Nairobi has about 470,000 square meters of shopping center space under  development underway and is one of the five largest cities in Africa (excluding south africa) in that regard (it currently has 391,000 square meters of shop space).

Knight Frank Shop Africa Nairobi spotlight

Knight Frank Shop Africa Nairobi spotlight

Knight Frank notes that, aside from Actis (the pioneering UK investor), most of the developers and landlords of Nairobi’s shopping centres are local Kenyan property owners.

A second Buffalo Mall is  to be built in Eldoret. This comes after the Pivotal Fund acquired 50% of Buffalo Mall Naivasha.

Carrefour: This week opened their first store in East Africa. a 60,000 square foot hypermarket at the Hub in Karen, one of 57 stores that have opened there. Carrefour will be the anchor tenant and are run under franchise of Majid Al Futtaim Retail of Dubai.   EdIt - Carrefour Kenya have an app for shoppers 

(The) Game operated by Massamart. in which Walmart has a majority stake, opened at Garden City Mall as the anchor tenant. 

Khetia:  are in the midst of a Kshs 1  billion expansion in western Kenya. They plan to open up stores in Kisii, Busia and Kericho, each of which requires Kshs  200 million.

Nakumatt: Just launched their 59th branch in Kakamega - the Nakumatt Midtown Supermarket. It was remodeled after nakumatt acquired three supermarket stores in Western Kenay (Kakamega, Bungoma, Busia) from Yako Supermarkets in a Kshs 260 million investment program. They have also added new stores like  Sports Planet departmental  at the reopened Westgate mall. 

Naivas The ownership of widely admired chain is subject to an inheritance court case. 

Sarit Center: Nairobi’s first formal mall is undergoing an expansion program to add more stores.  

Society Stores: An offshoot of a Khetia family member  - Trushar Khetia, hopes to grow the store brand. He says that they had the first chance to buy out Ukwala, but it wasn’t backed by the board and the deal fell through.

Two Rivers backed by Centum and built by Avic will also house a Carrefour store at the 62,000 square meter site in Ruaka that sits on 100 acres.

Tuskys: is focusing this year on staff welfare and streamlining customer service delivery through deployment of  digital platforms for e-commerce. Shareholders are also trying to settle issues in readiness for a listing at the NSE by 2018.

Uchumi:  Is under new management and, once again, in search of a restructuring deal that involves working with suppliers, sale of assets (such as Ngong Road and Langata branches) and a share sale to a new anchor investor for about Kshs 5 billion. This has been complicated by some suppliers who sued to wind up the company, but talks are ongoing with the government, and it  appears that majority of the  suppliers will agree to convert Kshs 1.8 billion of the dent owed to them into equity at Uchumi.

Ukwala was bought by Choppies of South Africa. The deal was completed after an tax agreement deal  was reached with the Kenya Revenue Authority who were demanding back taxes from Ukwala.  Ukwala had admitted to owing the taxman Kshs 101 million, but appealed the additional Kshs 845 million that KRA was demanding. 

Finally, suppliers,  have complained about delayed payments by supermarkets retail chains. This was highlighted in letter from the Kenya Association of Manufacturers (KAM) to Tuskys, Nakumatt and Naivas.

$1 = Kshs 100