Nairobi, A Business Stalls Heaven.
Walking around town, you notice that there are so many stalls.
How exactly is this business model sustainable?
Yes, we may agree that in a capitalist system like ours, the building owners prefer stalls compared to renting out bigger spaces. Is this just a way to answer the market needs for smaller space requirements or is it something else?
These stalls are giving establishments a run for their money for sure.
If you have a stall, to survive the stall's economy you have to do deliveries too just to cut through most of the competition. This is necessary because the next stall is selling exact items as you.
A customer walking in may see all similar items everywhere they look but they usually have a specific shop they are going to. How is that even possible?
You see, most of these stalls also have Social media pages. Most of them on Instagram and Facebook. Instagram is much more active since it’s a picture-based platform. Lots of business owners don’t have the patience for Facebook. It may have something to do with writeups for their merchandise pictures if they even get to post any. Most people are not good at copywriting. It's even much more expensive to hire one.
In addition, marketing on Facebook is tedious, customers are diverse with very different needs. To this end, Instagram is a little savvy and easier on the eyes, it has an edge over Facebook. It may be something to do with the
So, once they put up adverts on social media, it’s easier to tell their customers where to visit. “ Come to stall no. 15 at this exhibition on Moi avenue. “
It’s a great model so far, I just think it's not sustainable in the long run. The city is getting crammed with this. Won't be long before the Nairobi Metro introduces measures against this. Every other building under renovation is making stalls on the ground floor. Others have made them in their second and third floors too. A great cash cow.
Imagine if you are on the other side of retail stores. How do you outcompete these small shops? Their rent is low. They sell fast, they deliver fast. They have no employees really. They have worked well with the numerous riders available outside. On every street corner in Nairobi, you find riders.
Sure, you can try but still, a business running from a stall is a death blow to big retail stores.
Something good that has come out of this is that stall rent has been reduced considerably, the requirements for goodwill before getting into a building have also disappeared. A lot of businesspeople now just pay rent and one month’s deposit. This too will disappear as demand for small spaces
continues to rise.
The covid pandemic has also introduced a different set of capital issues, people pay late or just close down. So, this is putting pressure on rent reduction which is a good thing for customers.