Category Archives: Nairobi cost of living

Wadi Degla and Kenyan Clientele

Sports clubs have been in Kenya for over 100 years. The oldest is said to be Royal Nairobi that was founded back in 1906, and many of the other well-known golf and membership clubs, all started back in the 1920’s and 1930’s.

They still rule to this day, many with memberships of a few thousand each, and they are seen largely as the preserve of the very wealthy. Applying to join a club is a formal process, through introduction, approval by other members (a period in which one’s mini-C.V is placed on a wall for others to review) and some applicants even have to be interviewed for suitability.

wadi-degla-tennis-courtsThe clubs started in the colonial era with a focus on activities like golf and hunting and  with the large acreage mostly for male member sports. But today the needs of members have changed.

The clubs are now on modernization sprees to  accommodate the modern needs of their members. Some, which used to have large men’s only bars, are now re-doing club houses to better use the space, buildings and land they have, They have all had to re-invest in new facilities like meeting rooms, indoor sports equipment, gyms, restaurants and kids pools.

Wadi Degla clubs have modern designs that take into account the sports, social and leisure needs of modern families. Today sports club members, both male and female, desire the exclusivity of the clubs for networking and for business. They want facilities to exercise, and also for their children and families to also enjoy and perhaps get specialized sports training. Wadi Degla has a lot of these, with heated swimming pools (iincluding an Olympic-size one), running and walking tracks, and exercise gyms for up to 200 people.  They have business lounges and restaurants, top spas, shopping and kids training clubs to get specialized training in sports like soccer (by Arsenal Soccer), tennis, squash and (in Kenya) athletics – which will be done by Kenyan marathon champion Douglas Wakihuri at a new running school. They will have access to the five facilities in Nairobi including an 18-hole golf course  and the largest gym in East Africa.

Wadi Degla also targets expatriates (expats), and people new in the country.e.g.  all the engineers and managers building infrastructure and running companies around Kenya, They may not know the ropes of the city, or have people to introduce them to networks to get into other other clubs, but they can at Wadi Degla.

wadi-degla-gymThey also have special plans for expats and expat families can pay special fees that match the duration of their stay in Nairobi. For others who travel and live for long periods in different countries in the region, there is a provision for a member to commute (suspend) their membership while they are out of the country .

There are finance plans to ease payments for members, and there’s an ongoing discount on the one-off joining fee of Kshs 923,000 fee (~$9,230) for membership that allow access to all the clubs. They also allow up to 9 family members, and the cost is a total of Kshs 1.2 million for a typical family of four. Each family person gets their own card membership card and can access any of the clubs, and when kids become adults, at 21, they can graduate to full membership at about 1/3 of the cost. The costs are in line with the other top membership clubs in Nairobi where the joining fees range from between 300,000 – 500,000 per person), and while the joining fees are a bit lower, they have more capital raising and additional fees to fund infrastructure modernization projects. The discount on the membership runs through October 13 when the first Wadi Degla facility opens in Runda.

$1 = Kshs 101 

Water Moment: Understanding Nairobi Water Bills

Have you been getting more and more visits from the water meter crews from Nairobi Water (NCWSC), demanding payment?

For years, I’ve been paying every month the same amount of about Kshs 500 (~$5), without seeing my bill, but of late, the bill has always remained over Kshs 1,000 even when I have paid twice within the month. One day they even came around with a bulldozer which they told area people was to yank out meters from people who have not paid.

So I had some tweet chats and went  to the NCWSC offices and found out some stuff:

  • They no longer send out statements or hardly do. They have cut back on mailing statements via the post office. They won’t even issue you with a bill event at the office
  • They increased their rates at the end of 2015. The guy who came with the bulldozer and another at the NCWSC office said the rates doubled at the beginning of the year.
  • They have instituted a charge of Kshs 1,000 on every unpaid or overdue bill. This means even if you’re late on a Kshs 204 bill (the lowest bill you can get), you get charged Kshs 1,000.
  • You can check your bill via *888# on your phone. Sometimes the SMS comes through without information but you still get charged Kshs 10 for the service.
  • They have an online platform for one to check bills but not ready. Alternately there is a There is a Jambopay Water Bill checker that’s  free to check your bill. It is accurate, but often offline.
  • It costs Kshs 33 to pay your water bill via M-Pesa (assuming Kshs  30 goes to Safaricom and Kshs 3 excise tax charge of the financial service.
  • The due dates for bills vary in the month, depending on when the water readers come round to read or estimate the amounts.
  • Water, electricity and other utility companies can now report customers to credit reference bureaus over unpaid bills.. but who is the customer to be reported? The person who pays the bill? This is often a tenant of a house or building. Or the registered owner of a property with a meter? Sometimes this is the landlord or the contractor who put up the building.

waterOther water tales:

  •  A few years ago, IBM Research in Nairobi gave a talk on the water situation in Nairobi. There are 3,000 known boreholes in Nairobi and it can cost $10,000 to drill one as you have to go deeper than 400 meters instead of 200 in the past.
  • IBM also reported that 40 – 50% of water sourced is lost (just doesn’t get to consumers) AND that 50% of hospital visits in Kenya may be water/sanitation related.
  • A feel good story about water supply and the World Bank in Kenya.
  • Are water charges going up again? – Not sure if these are even more new charges from October 2016
  • Adding value to waterHow the business of bottled water went mad ..How did a substance that falls from the air, springs from the earth and comes out of your tap become a hyperactive multibillion-dollar business? (The Guardian)

Even with the new water rates, getting water from the NCWSC is a lesser evil than paying for your lorries, but…

$ = Kshs 101

12 Free Things in Nairobi (Redux)

It’s been a few years since the last list. What can one still get for free in Nairobi?

3. ‘Free burger’: A few restaurants have this on Thursday

4. Free Internet: Most Java, Art Caffee and coffee shops now have free WiFi all day.

5. ‘Free pizza’: (Still around are) buy one get one free on Tuesday at Pizza Inn and buy one get one free on Friday at Debonairs.

7. Free magazines/newspapers: People Daily newspaper has been free for over a year, but you have to be early in traffic or have a spot where you can pick up a copy. There are  lso quality in several free publications like Yummy and Msafiri magazines. free-newspaper

8. ‘Free bank loans’: (Still around are) Use your credit card carefully and pay off the full amount at the end of the month – (some cards give almost two months free).

9. Free money transfer: Equity has said that Equitel money transfer will be free forever. Airtel also has several free payment options, but which it doesn’t really market well. (See how much value Airtel gives away – via Kachwanya)

11. ‘Free calls’: Both Airtel and Safaricom offer you free calls if you reach some threshold of spending in a day, but the messaging is  confusing. Safaricom also offers to reimburse you if a call is dropped.

12. Free investment advice: Now Twitter is the main forum

New

Free Meeting Rooms: Again, coffee shops are pleasant neutral meeting places, You can sit and wait if your guest/host is later. Also it’s much better than visiting anyone’s office where there are hassles of traffic, them being late, having to show your ID, register your laptop, park in inconvenient spaces etc.

Free Parking: The Hub in Karen and Garden City Mall on Thika Road have free parking. At many malls, parking is no longer free, and expect to pay Kshs 50 to Kshs 100 for two hours and it gets punitive if your park for longer than that.

Free Taxi Rides: With all the new taxi hailing apps in Nairobi, there are often free rides for new subscribers, to/from major Nairobi events and for regretting people to the services.

Now Gone

1. ‘Free’ books: at the Book Villa. Become a member and read as many new, best sellers, finbooks, travel non-fiction books etc. No more free books 

2. ‘Free’ breakfast: at Books First/ Nakumatt buy one get one free on Sunday morning no more free breakfast

6. ‘Free movie meal’ (hot dog, soda, popcorn) at Nu Metro on Monday with purchase of a movie ticket

10. Free classified advertising: place a classified ad in the Nairobi Star newspaper; send a text message and it runs on the next day

What other items are free in Nairobi? 

$1 = Kshs 100

Farewell Naked Pizza – Part II

About two weeks ago, we got the unexpected news that the Naked Pizza chain was closing shop. I sought out Ritesh, the owner, and face, of the Naked Pizza Kenya franchise to ask about what happened.

We met for coffee at one Artcaffé, and he spoke about his background as a career investment banker who had lived an “up in the air” lifestyle (see the George Clooney movie) – at Credit Suisse and HSBC. He worked in Africa, Europe, Middle East and the US.

When he stepped away from banking, he started advising a few companies that were  trying to restructure their operations.  One of them was in the UK health sector. In the process, he bid alongside other investors and was the top bidder. And just a few months after he restructured and re-launched it, another health company bought him out.

When he first stated scouting the food business, no pizza brands were interested in Africa. He convinced Naked Pizza executives to meet him in Dubai when they toured their operation there. He then flew them to Nairobi and won them over and they signed a deal with him for the Kenya franchise.

 He then trained for a few weeks at Naked Pizza in Dubai, including in one of their pizza stores. He returned to Kenya and set out to hire a team, for which he paid above market rates for his staff. Some people working at other Nairobi pizza chains also applied, but after interviewing them, he shied away from them, as he felt they had in-built attitudes and practices. He preferred newbies to the food business.

Ragin Cajun at Naked Pizza Kenya

Setting up took longer. They had to import equipment and build a supply chain with companies who would deliver quality cheese, meats, grains, and vegetables to be ever fresh.

The (Westlands) store location was not ideal for some (like me), but it worked – as 85-90% of their pizza business was deliveries. And being in that building was about 1/3 of the cost of setting up in a mall.

They had a soft launch, with a focus on product, customer, and delivery. i.e. to get fast deliveries of great pizza to happy customers.

In the early days they built their own neighbourhood mapping system to ensure fast deliveries. He also got on the bike and did deliveries with the riders, as the teams noted unique Nairobi details (“e.g. the blue gate on Parklands Road, after three bumps”), which they then added into the ordering system to ensure faster deliveries in the future.

On some days when orders came in, and all the delivery motorbikes were out, he’d sometimes grab a pizza and do the delivery with his car. They started with deliveries near the store, and slowly increased i.e. from a store radius of 5 minutes, then 10, then accepting orders to neighbourhoods with 15 minutes radius of the store. This was a challenge as people from farther would call and ask for pizza, and they would have to decline orders, as they were outside the radius.

They had opened shortly before the 2013 Kenya election, and on election day,  they became an object of curiosity with their commitment to remain open and deliver pizza on election day.  They also ensured that all their staff got to vote, by having them take different work shifts.

International media came to cover the pizzeria that vowed it would be open to serve customers, despite the wide international fear that Kenya’s election would again be violent. The Kenya election may also have been a turning point for him in ways that he did not realise till much later. The election news coverage was noticed in the USA – by some pizza managers who did not associate pizza with Africa, but could now see Ritesh on CNN.

They never had to market the chain. They got a lot of mileage from a fun twitter account that he ran by himself, before he handed it over to a keen staff member. They would tweet on customers, deliveries, and suppliers, and also  when rival pizza owners would come to eat at Naked Pizza and see what was drawing their customers. He resisted doing promotions like the buy one get one free pizza that captivates many in Nairobi.

They had loyal customers who kept ordering more pizza. Their were also some awkward moments with the customers – like some who ordered pizza, while they were on a date somewhere, but the pizza was taken to their house (which was listed in Naked Pizza system) – and that was  a surprise! Or others who ordered the smallest food item to go along with a large quantity of reasonably priced alcohol to be delivered by Naked Pizza just before 11PM.

Ritesh couldn’t talk about numbers paid for the exit (Pizza Hut bought the restaurant operations of Naked Pizza). One of the things he negotiated for in the deal, was for the buyers’ company to take on all his Naked Pizza staff to work in their different companies.

But the departure was not about the difficulty of the business, which was a success, but one full of battles that were not necessary. He had a whole wall of licenses (as does every Kenyan business, that any government inspector could walk in and ask to see any of a dozen different licenses at any given time), equipment that got stuck at the port with demands for bribes, they did well on tenders that were later canceled and re-advertised, there were phone calls, arrest and harassment of delivery motorcycle riders etc.

The decision to exit was not instant. Soon after he signed on for the franchise, an investor power shift took places at Naked Pizza headquarters that ejected the key partners who he had negotiated with. This left him without crucial mentorship and support that he needed. He got some help in Nairobi – where  some food executives such as Kevin Ashley (Java) and Gavin Bell (Kengeles), welcomed him, and advised him. But others, especially in the pizza sector were not as welcoming.

As he’d grown the business, he’d scaled back the ambitions he had – his initial plan was for 15 stores, then 10, and then 5. Eventually they opened three stores in three years. Pizza’s need customers, and there are some industry numbers that are true no matter what country you are in the world e.g. one pizza store needs to serve 50,000 households in the area.  Also a new store opening nearby can drop the sales of a pizza restaurant by  30–40% instantly, which they could expect and could build back these numbers over the next few months.

But the more pizza stores that are in an area, the more buyers everyone would have to find. And he really didn’t see the market, that other global brands were now chasing. Nairobi now had Pizza Hut and Domino’s Pizza. The new entrants, inspired by “Africa Rising” statistics (and his CNN and CNBC stories!) were ambitious and opened stores at a rapid clip, and had plans to open many more in locations that did not make apparent sense to him. He own findings did not show that there was a prosperous middle class, ready and able, to buy quality pizza in Nairobi.

So it was time to move on.

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..