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Edition 01 | MARCH - MAY, 2015

Shoppersâ&#x20AC;&#x2122; Insight Making smart choices + Cashless shopping BIDCO - Consumer brands

Digital migration

INSIGHT CONSUMER | MARCH - MAY, 2015

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DROPPING POINTS Branches: • Langata

• Kahawa West

• Limuru

• Ongata - Rongai

• Kerugoya

• Kiambu

• Nyahururu

Branches: Machakos town • Pioneer • Express • Masaa

Mlolongo town • Highway • Mtaani Emali branch Tala branch

Branches:

• Kitengela

• River Road

• Kajiado

• Mfangano

• Mwea

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Branches: • • • • • •

Kisumu Ongata Rongai Utawala Pipeline Donholm Tassia

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Logo concept Logo 6.4

Do not take measurements from this drawing: All measurements must be checked during work.

• Thika Branch © JosDeVries The Retail Company BV

• Embakasi Branch

STRATEGY • DESIGN • COMMUNICATION • MANAGEMENT

INSIGHT CONSUMER | MARCH - MAY, 2015

font is bliss

• Selected Branches*

INSIGHT CONSUMER | MARCH - MAY, 2015

CONTENTS 6 9 11 4

12 13 17

How do you tell your loan is competitive?

Bank of Africa Kenya Retail Financing

Parinaz Firozi: Breaking physical retail dominance in Kenya

INSIGHT CONSUMER | MARCH - MAY, 2015

Facts About Digital Migration

Farm fresh pasteurized milk, oil, yogurt on tap

BIDCO AFRICA LIMITED: The home of heritage

Chief Editor’s Note W Esteemed reader,

elcome to the maiden issue of Insight Consumer Magazine; dedicated to consumers across the board. The purpose of this publication is to enlighten readers on issues that we all come across as consumers of various goods and services. In this particular issue we look at digital migration, financing as well as some consumer brands which are popular among many a consumer. Insight Consumer Magazine is a quarterly publication distributed freely among selected retail stores in Nairobi as a pilot program before rolling it out to other major towns in Kenya. The publication is also available on www.insightpublication. org or www.Insightretails.com

Titus Korir

Esteemed suppliers are welcome to engage this platform to further build their brands among their targeted consumers while showcasing available products and services. Among the scheduled areas of interest for publishing and working with suppliers to enlighten consumers include; • Consumer brands • Education • Property management

• Healthcare • Finance & insurance and

Finally, we wish to extend our gratitude to all stakeholders who have partnered with us to roll out this publication and thank you for your continued support and contribution. We look forward to your feedback which you can share with us on consumer@insightpublication.org.

Happy Reading!

Brand Editor’s Note Dear Reader, I take this opportunity to welcome you to the first edition of Insight Consumer Magazine whose aim is to enlighten you the shopper or consumer before making the decision to purchase that product or service. Today, consumers are faced with overwhelming thoughts before making that final decision of purchasing a good or service in a market characterized by ever changing consumer trends and innovations. Symon Chomba

This magazine is intended at giving you first hand information and the insight that you need to make smart choices by keeping you on tabs with matters trends, finance, healthcare, education, property, insurance and consumer brands. We have therefore partnered with several organizations and industry experts in the pursuit of creating a pool of information for you. This is a free quarterly magazine but the frequency will be reviewed upwards in subsequent editions to cater for increasing consumer demand. I therefore hope that you will appreciate our desire to give you an informative and enjoyable reading experience. For your online reading and feedback kindly pay us a visit on http://www.insightpublication.org/. We would love to hear from through consumer@insightpublication.org. INSIGHT CONSUMER | MARCH - MAY, 2015

CONSUMER TRENDS

FACTS ON DIGITAL MIGRATION The Supreme Court on 13th February 2015 ruled that the analogue switch-off dates remain as scheduled ahead of the international deadline of June 17th 2015. The Analogue switch-off dates had been set as follows: • Phase 1: 31st December 2014: Nairobi and its environs. • Phase 2: 2nd February 2015: Mombasa, Malindi, Nyeri, Meru, Kisumu, Webuye, Kakamega, Kisii, Nakuru, Eldoret, Nyahururu (Nyadundo), Machakos, Narok and Londiani (Rongai). • Phase 3: 30th March 2015: Garissa, Kitui, Lodwar, Lokichogio, Kapenguria, Kabarnet, Migori, Voi (Vuria), Mbwinzau/Kibwezi, Namanga and any other remaining sites. The Supreme Court ruling implied that any stations still broadcasting on the analogue platform in the areas already switched off were required to migrate to the digital platform with immediate effect. The Authority gave media houses on the analogue platform up to midnight of 13th February 2015 to migrate to the digital platform. All media houses migrated to the digital platform except the three media houses, Nation Media Group, Standard Group and Royal Media Services. The Authority on Saturday 14th February, 2015 took necessary regulatory action to switch-off their analogue signals. The three on their own volition went ahead and withdrew their content from the digital platform (SIGNET and Pan African Network Group signal distribution networks) and selected pay TV service providers (Star Times, DStv and GOTv). The Authority has noted with concern, deliberate misinformation and allegations perpetrated by the three media houses to the public. The Authority would like to set the record straight as follows:

ALLEGATIONS

FACTS ON DIGITAL MIGRATION

More than 90% of Kenyans staring at blank screens as analogue transmitters of the three media houses are switched off

More than 1.2 million households have purchased set-top boxes and can therefore access the channels on the digital platform. The market has more than two million set-top boxes currently in stock with more under importation. The estimated numbers of television sets that need to be migrated are four million.

21 digital TV frequencies were assigned to the ADN consortium, where members of the consortium already had analogue coverage. After the analogue switch-off is complete there will be more frequencies available for distribution. There is, therefore, no discrimination in the issuance of frequencies as purported. The government is curtailing media freedom and infringing on rights of citizens to information

The media houses failed Kenyans by not preparing for this technological change. It should be noted that Kenya’s failure to migrate will negatively impact the frequency planning in the country and neighbouring countries. Digital migration will cause On the contrary, digital migration will create thousands of jobs and huge job losses in the media investment opportunities. The Authority has already licensed over 40 sector content service providers on the digital platform. The providers have to create content and this will uplift the media and ﬁlm production industry and create employment. The deadline for migration The international deadline for digital migration of 17th June 2015 is set is movable and cannot be changed. There isn’t enough awareness about digital migration

The switch-off was only effected in the regions earmarked in Phase 1 and 2. It is important to also note that only analogue transmissions were switched off in the exercise. Government has forcibly switched off analogue frequencies and that the switch-off is in bad faith

The Supreme Court ruled that the timelines agreed on for the phased switch-off remain valid. The enforcement action taken by the Communications Authority of Kenya on 13th February 2015 was, therefore, mere enforcement of the ruling for non-compliant media houses. The three media houses have the avenue to air their broadcasts through the digital networks currently available. They voluntarily withdrew their content from the available digital platforms SIGNET, PANG and DSTV, yet these have even a wider reach than the analogue transmissions the media had before. KTN, NTV, QTV and Citizen TV only had 11 analogue transmission stations collectively, which was a very small proportion of what the digital network coverage currently offers.

The Communications Authority of Kenya effected the switch-off the three media houses before reinstating the digital frequencies and self-provisioning authorization

The Authority had issued the three media houses with temporary authorization for self-provisioning in November 2014. This was withdrawn on 21st January 2015 after the three media houses ran misleading advertisements between 16th and 20th January 2015. This was in contravention of the Kenya Information and Communications Act, 1998. The said advertisement purported that StarTimes and GOtv were illegally carrying the content of the three media houses, thereby infringing on their copyright and neighbouring rights. The advertisement went further to instruct consumers not to purchase StarTimes and GOtv pay-tv set-top boxes to watch CITIZEN Television, NTV, KTN and QTV.

Set-Top Boxes are not available in the country

Kenya is taking on a Pay TV model and forcing wananchi to pay in order to watch television in the digital broadcasting era

Kenyans are only relying on two television stations for news

Free-to-Air and

The Authority has licensed more than 40 Free-to-Air channels on the digital platforms, with over 30 on SIGNET and 8 on PANG Platform. Free-to-Air channels currently providing news include KBC, K24, Kass TV, GBS, EBRU TV, 3 Stone TV and Njata TV, KTS, Pwani TV and Lolwe TV. News is provided in English, Swahili and vernacular languages. SIGNET is on air in Nairobi, Mombasa, Kisumu, Nyeri, Nakuru, Nyadundo, Eldoret, Machakos, Nyambene, Embu, Muranga, Naivasha, Narok, Kisii. SIGNET are expected to be on air by end of this week in Malindi and Siaya. PANG is on air in Nairobi, Mombasa, Webuye, Kisumu, Nyeri, Malindi, Nakuru, Eldoret, Nyambene (Meru), Nyahururu, Machakos, Narok, Kericho (Kapchepto) and Kisii. The three media houses were on air in Nairobi, Mombasa, Webuye, Kisumu, Nyeri, Nakuru, Eldoret, Nyambene (Meru), Nyahururu, and Kisii. This was a small percentage of coverage in comparison to the overall current digital coverage. Additionally, most Kenyans access news from various platforms including radio which has a wider reach than television. Radio is not affected by digital migration and services are still available to Kenyans.

It would be illegal for ADN to begin importation of these gadgets without prior approval.

INSIGHT CONSUMER | MARCH - MAY, 2015

The market has two types of set-top boxes. subscription based set-top boxes.

Viewers who would like to access premium content offered by Pay TV providers have the choice to purchase the pay television subscription set-top-box. Pay TVs set-top-boxes attract a monthly subscription fee according to the bouquets offered by the service providers.

The three media houses, through their consortium, Africa Digital Network (ADN), applied for a vendor’s licence on 12th February 2015. The application is now under consideration. However, ADN is yet to submit a sample set-top box for type-approval.

The two BSDs i.e. SIGNET and PANG have been assigned the same number of frequencies countrywide with at least two frequencies in every broadcast area. However, utilization of these frequencies is dependent on their rate of infrastructure roll out. To date, PANG has activated more transmitters compared to SIGNET.

No Kenyan needs to pay to watch TV.

The Free-to-Air model is a one-of purchase price and viewing attracts no extra costs.

Before importation of set-top boxes, the law requires interested parties, to apply for a vendors licence from the Authority, and subsequently submit a sample set-top box for type-approval.

The ﬁrst Broadcast Signal Distributor (BSD) licence was awarded to SIGNET, a subsidiary of Kenya Broadcasting Corporation. The second BSD licence was an open tender that was competitively won by Pan African Network Group (PANG). This was after the application by the National Signal Networks failed to meet the required criteria and was therefore disqualiﬁed.

The Authority has licensed over 80 vendors who are selling set-top boxes in supermarkets, electronic shops and their respective outlets across the country. The market has over 2 million set-top boxes in stock available for purchase by consumers.

The Supreme Court, on 13th February 2015, directed the Authority to restore the self-provisioning authorization and the requisite frequencies with a condition that the media houses abide by all the conditions that had earlier accompanied the grant of authorization for self-provisioning.

The Authority and the Government are unwilling to support and protect local media houses against foreign interests over the distribution of frequency signals.

Geo Poll, the world’s largest mobile survey platform, recently carried a study on digital migration awareness in Kenya. The study showed that 88% of Kenyans are aware of the requirement to migrate to digital broadcasting. This level of awareness has been achieved despite the refusal by the three media houses to carry paid advertisements on digital migration and provision of correct information to Kenyans on the issue of digital migration.

The tone of the advertisement, its content and timing was intended to cause confusion and disrupt the digital migration process.

The three media houses will soon avail cheaper set-top boxes and have requested for more time to enable them import these set-top boxes

Digital television broadcasting is a technological change with numerous beneﬁts to the country. The process begun in 2007 and all media houses and other players have had enough time to prepare ﬁnancially, commercially as well as technically to migrate to the digital platforms.

We urge Kenyans to embrace the digital migration and to seek factual information from our various communications platforms indicated below. Issued by:

Francis Wangusi Director-General Tel: 0703 042 470/1/2, 0703 172 331/2/3, 020 4242470/1/2, 020 4242331/2/3 digitalTVkenya

DigitalTVKenya

www.digitalkenya.go.ke

INSIGHT CONSUMER | MARCH - MAY, 2015

RESUME / CV WRITTING

WRITING A WINNING CURRICULUM VITAE • Tailor the cv to the job. Create a cv specifically for the role you are applying for by adopting your relevant skills and abilities. Mention key attributes that can make you stand out from the other applicants. These include: communication skills, integrity values, team work, problem solving abilities etc. Focus on the employer satisfaction.

A 8

CV (curriculum vitae) is a document that should aid in marketing your accomplishments skills and abilities so as to connect with the employer and win his favour. It should be appealing, outstanding and have a convincing power, clearly conveying why you are the best fit for that job you are looking for. Writing a cv is quite challenging and mistakes are prone to happen. There is no precise, standard way of constructing a cv. It is a personalized document and can be structured as you wish. However, there are basic vital elements that could either be your ticket for that interview or see your cv thrown straight to the bin. • Presentation is key. Make it easy for the employers to read through in the shortest time possible. It is important to have a clear visual hierarchy where the hot-spots can be instantly identified by the employer. These include: Personal information, objectives, summary of work experience; indicating the start date and end date, from the previous job to current. Academic qualifications; from the lowest level to the highest. Leadership roles or membership. Other training, community or voluntary work. Hobbies and then professional referees; maximum of three with their titles and contacts. • Get the basics right. Typos and grammatical errors are the most embarrassing mistakes you can make. It is always advisable to double check every minute detail before handing in your cv. Ensure that you get the right information as pertains to the job description. This will help you to know the skills required. Remember, small errors are job search worst enemies.

INSIGHT CONSUMER | MARCH - MAY, 2015

• Do not leave out important information. You may be tempted to leave out the odd jobs you have done for the extra cash but, the soft skills gained could be what the employer is looking for. However, do not incorporate too much personal information especially when it is not a requirement. Name, age, contacts and physical address should be adequate. It is also important that you should not shortchange your resume just to conform to an arbitrary 3 page standard. • Be confident. Employers do not want to hear about your relevant success but how you have achieved them. Make statements that you can back up with facts and be proud as opposed to passive. However, do not state how great you are without hard evidence. This could make you seem dishonest and you could be liable to other offences. Writing a cv is a continuing process, just like a masterpiece it is never finished. It is therefore, important to constantly update your cv and make it easy for recruiters to go through.

DISPENSING MACHINES

Farm fresh pasteurized milk, oil, yogurt on tap

n various urban and peri-urban areas of Kenya, there is a lot of demand for processed but affordable milk however, much of it is inaccessible by the consumers as it is sold in packages – a preserve for a few. To bridge this gap is the concept of milk dispensing which has seen many more households access this precious commodity. The advent of milk automated dispenser machines (ADMs) in various small to large outlets and stores today has significantly changed the way milk consumers purchase processed milk. ADMs are similar to those that are used in dispensing bottles of sodas, candy or even tea or coffee by inserting some coins. Based on one’s budget or income, consumers can get their desired quantity of quality farm fresh pasteurized milk. In most outlets where an ADM has been installed, consumers are able to get milk for as low as Kshs. 20. Some are able to purchase in large quantities which they can store for a longer period depending on their usage. Of interest to many consumers is the fact that ADMs have been able to cut

PRODUCTS ON TAP

off possible avenues for contamination as the numbers of handlers are reduced. Once the milk is in the dispensing machine milk shop, workers have no access to it thereby tampering with the quality of milk. Still, ADMs have continued to eliminate hawkers despite a countrywide practice who continue frustrating consumers by selling low quality milk at high prices and likely to be contaminated due to hygiene factors. In purchasing their milk, consumers can either buy a new container which many ADMs outlets stock for a price or use their own to carry the product. According to Geoffrey Gitonga, the chief executive of Farming Solutions Limited, the company behind the ADMs - an Italian borrowed concept, consumers can not only purchase affordable and hygienic – pasteurized milk but also yogurt, fermented milk ‘mala’ as well as cooking oil through the various ADMs that have been installed in most of their preferred stores and those near the residential areas. “Consumers can not only purchase affordable and hygienic milk but also yogurt, fermented milk ‘mala’ as well as cooking oil from our dispensers” INSIGHT CONSUMER | MARCH - MAY, 2015

CONSUMER BRANDS

BIDCO AFRICA LIMITED:

f there is a company whose products remain a household name among many a Kenyan homes is those from Bidco Africa Limited. Whether in large or small quantities to suit the various levels of income earners, Bidco’s products continue to grace homes generation after generation. Over the years, Bidco has successfully won over the market, becoming, the largest and fastest growing manufacturer of vegetable oils, fats, margarine, soaps and protein concentrates in East and Central Africa. Here are excerpts from Bidco Africa Limited.

Nearly three decades later, Bidco remains an integral household name. Briefly take us through the various products and target market. At Bidco we strive to promote ‘Happy Healthy Living’ hence we produce brands that touch the lives of our consumers every day. The different products cater to everyday needs of Kenyans both in the hygiene and personal care categories. These include soaps and detergents as well as the edibles categories which includes our fats and oils. Aware of the importance of technology for any meaningful future development and efficient management in production processes, our willingness to embrace and adapt to new realms of state of the art technology has also kept us well ahead of the rest. Bidco’s brands cut across all markets. How have you kept up with this? As a truly customer focused organization, our belief is ‘Customer is King.’ We strive to offer our customer’s reliable services and quality world class brands at the most affordable prices. This is no straight forward task as today’s consumer is ever changing hence our mantra ‘Know you consumer (KYC)’ which is the guiding principle when we are developing our products. Due diligence and proper research is done at the stage of inception to ensure that whatever we produce caters to the needs of our consumers. Which are the most the popular brands and why? Almost every home or consumer is familiar with Elianto, Golden Fry, Kimbo, Chipsy, Powerboy Liquid and Nuru. A key factors that has contributed to this is the heritage of brands such as Kimbo whose presence in almost each and every home remains

Vimal Shah phenomenon. Our vast excellent network of distribution also works well for us as the products are always available for the consumers. What makes Bidco’s products stand out on the shelf despite the competition? Bidco promises quality products that are of the highest standard and that is why customers keep coming back. We adhere to the highest standards of quality and practice. It is one of the first companies in the region to adopt the stringent standard of operations in compliance with international standards. Using ISO 90001:2008 ensures that customers get consistent, good quality products and services, which in turn brings many business benefits. ISO 14001:2004 sets out the criteria for an environmental management system that provides assurance to company management and employees as well as

INSIGHT CONSUMER | MARCH - MAY, 2015

external stakeholders that environmental impact is being measured and improved. OHSAS 18001 is internationally accepted as a method of assessing and auditing occupational health and safety management systems. It provides a framework for organizations to instigate proper and effective management of health & safety in the workplace. ISO 22000:2005 certification confirms company’s impeccable Food Safety Management Systems in keeping with international standards, from manufacturing to supply chain partners while ISO 22000 is a recognized food safety certification. In addition, we comply with maximum hygienic and humanitarian standards required by Islamic dietary laws. Mr. Vimal Shah is probably one of the most sought business people in the region - what is the secret of succeeding

CONSUMER BRANDS

: The home of heritage amidst such tight schedules? Focus and being able to know what things make a difference at the end of the day. When you can make a difference in between your schedule, you add value to someone or something. What inspirations/lessons do you draw from sitting on various company/ organization boards, speaking in various local and international business related forums to managing a multibillion company? Bidco and all the experiences and opportunities that it has afforded me have taught me that determination, values and vision make a difference individually and at an organizational level. I have learnt that business is all about innovation and continuous improvement. You are always arriving never arrived. What lessons can aspiring business people learn from the Bidco’s success as well as running family businesses? The trick with family businesses is to get the issue of governance right which requires strong values, a common vision and inclusive leadership. If these things are in place, a family business will not experience conflicts with regards to titles, positions or money. Bidco’s formula is easy; start small, aim big and keep improving. Innovate and deliver quality on time at the best cost possible. There are no quick wins, stick it out-you will get your reward.

There is a never-ending concern on the high cost of production that Kenyan investors are subjected to, what needs to change? Power is one of the big variables in production but thankfully we are witnessing costs decreasing. Infrastructure is another critical aspect - the easier it is to move goods the better it is for the manufacturer.

the Real Place. Companies such as Toyota have been successful because of the use of the Kaizen methodology in achieving operational excellence (OE).

Any interventions that Bidco has taken to tackle the high cost of production? At Bidco we undertake different energy projects including use of fossil fuels, electrical and renewable energy to address the high cost of production. In 2014, we saved approximately Kshs. 113 million.

Kaizen is the only successfully proven methodology that increases the value addition in the value stream by way of identifying, reducing or eliminating the non-value adding activities in any value stream. At Bidco, Kaizen is part of the daily work management.

Bidco aims to be a market leader in household products (detergents, soaps and cooking oils) across Africa by 2030 – How have you been able to defend your business territory so far? What mechanisms ensure that Bidco is on top of the game? There is no secret to it other than quality by deploying the best and latest technology to eliminate waste, focus on what we are good at and improve on it every day. Bidco is among the companies where the Japanese “Gemba Kaizen” practice remains useful, kindly take us through it and how it has worked for you 16 years ago, Bidco Africa Limited embarked on the never ending journey of Kaizen. “Gemba Kaizen” means Continual Improvement at

It is one of the most fundamental tools used in achieving efficiency and productivity at an operational level and increasing the top line and bottom line for all organizations in pursuit of OE.

From a business perspective, do Kenyan companies (public/private) require such practices to operate their businesses? Any business needs a holistic approach to management, an internal compass for its activities and processes. It makes it easier to engage everyone and focus them on achieving the business goals in a systematic way. Any new areas in the FMCG sector that presents Bidco an opportunity to invest in? Plenty. There are numerous opportunities … just watch this space.

INSIGHT CONSUMER | MARCH - MAY, 2015

CONSUMER FINANCING TIPS

How do you tell your loan is competitive?

n July 2014 commercial banks in Kenya began disclosing to loan applicants the components that make up the total cost of credit as a percentage known as the Annual Percentage Rate (APR). This was followed with the launch of the “Credit Calculator Online” website (www. costofcredit.co.ke) and mobile application that were developed by Kenya Bankers Association (KBA) in conjunction with the industry’s implementation of the Kenya Banks’ Reference Rate (KBRR) and the APR pricing mechanism. The Annual Percentage Rate (APR) pricing mechanism enables consumers to compare different bank loan products based on standardized parameters and a common computation model.

According to the KBA Chairman and KCB Group CEO Joshua Oigara, it is anticipated that KBRR and APR will enhance pricing transparency while stimulating competition within the banking industry.

“Promoting transparency in lending remains a priority for the financial services sector and for banks in particular, we therefore are thankful to our stakeholders, including the Central Bank of Kenya and the National Treasury, for their partnership in this quest to enhance access to credit through progressive and enabling policies,” said Mr. Oigara. APR is made up of an interest rate component that is derived from KBRR plus individual banks’ administrative costs and product related fees, a risk premium and the banks’ profit margin; as well as related third party costs such as legal fees. Mr. Oigara noted that KBRR and APR are just two of the interim and long-term interventions by the sector to enhance credit access. Enhancing Access to Credit According to the KBA CEO Habil Olaka, the industry-led APR implementation is also a consumer protection intervention that highlights banks’ commitment to provide customers with facts that they need to make informed credit decisions.

KBA CEO Habil Olaka, KBAChairman and KCB Group CEO Joshua Oigara, and Farwell Consultant MD Simon Lee during the launch of the Annual Percentage Rate (APR).

“As an industry, we are enhancing pricing disclosures in order to enable bank customers to make more informed choices. This is one of the mechanisms embraced by banks to address issues relating to easing access to credit,” said Habil Olaka.

other entities, including non-bank credit providers, utilities and mobile network operators.

Beyond interest rates, there are other costs that influence access to credit. And through the Cost of Credit Committee the Government, regulators and industry have identified priority initiatives to address these inefficiencies.

When you borrow, the cost you incur is beyond the interest rate. The next time you apply for loan:

“Beyond interest rates, there are other costs that you should consider...” Among them include reforms of the Lands and Companies Registries; establishing the legal and regulatory framework to support the creation of an electronic movable assets register; and expanding credit information sharing beyond KBA Member Banks to all regulated banks and

INSIGHT CONSUMER | MARCH - MAY, 2015

Visit www.kba.co.ke to learn more about banking industry initiatives.

1. Inquire about the Kenya Banks’ Reference Rate and the bank premium (the “K”) 2. Have the bank provide you with the Total Cost of Credit breakdown & Loan Repayment Schedule 3. Ask for the Annual Percentage Rate (APR) that includes bank charges and estimates for Third Party Costs for the product you are interested in 4. Use the APR to compare your first option with similar loan products in the market. Visit www.costofcredit.co.ke and use APR Calculator to compare the product APRs

CONSUMER FINANCING of the loan as well as have some sort of security from the customer. Asset Finance & mortgage facilities will require the customer to put down a deposit of at least 20% of the amount sought. The payback options of the various facilities are determined by the nature of the loan given. Overdraft facilities are due on demand but renewable on an annual basis. Working capital facilities are offered for a maximum period of 48 months.

Bank of Africa Kenya Retail Financing

ank of Africa (BOA) Group was founded in 1982 in Mali. The Group has its headquarters in Dakar – Senegal with an African presence in 17 countries.

offers Capex Financing and Trade Finance – commonly referred as LC’s and PDT’s. With regards to infrastructure, the bank offers construction or mortgage facilities as well as asset financing.

Bank of Africa - Kenya commenced its operations in 2004 after taking over the business of Credit Agricole Indosuez. The bank has 34 branches and two business centers countrywide up from two branches which it operated more than a decade ago.

Lending Process Lenders who choose not to finance retail stores may not have the necessary experience or understanding of how this business works. For BOA - Kenya to advance any of the financial facilities, the bank will certainly assess a retailer’s capacity or repayment ability which is reflected by the business’s cash flows. It will also do a background check on the customer’s character with regards to credit history through a Credit Reference Bureau (CRB).

BOA - Kenya is committed to helping businesses grow at every step of the journey through its numerous product offerings targeted at retailers. The bank offers working capital solutions which include and not restricted to overdraft facilities, stock financing, invoice discounting and contract financing. It also

Other issues to take into consideration are the amount needed and purpose

Invoice discounting and contract financing terms are 90 days of the trading terms while the mortgages are offered at a maximum period of 15 and 10 years for residential properties and commercial construction respectively. Consumer / Shoppers Financing Customers can now get goods they wish for and pay in 12 months. Mkopo Poa is a consumer loan developed by Nakumatt Holdings in partnership with BOA – Kenya offering quick access to household goods from the stores. With a response time of 48 hours from application, customers will have access to a wish list that falls between goods worth KShs. 50,000 and 500,000. These goods range from furniture, electronics to workout equipment among others all availbale at the Nakumatt stores. A simple three step plan is followed; a customer walks into a Nakumatt store, selects the good(s) desired, fills in an application form and gets a notification from BOA-KENYA on the loan status within 48 working hours. As Bank of Africa Kenya aims to understand the nature of the business to help one grow, the bank considers itself as a partner on one’s journey to success. This is what differentiates BOA from other lenders.

INSIGHT CONSUMER | MARCH - MAY, 2015

SHOPPERS INSIGHT

MAKING SMARTER PURCHASES it will likely make you pay more especially for new items in the market. When a product becomes popular their prices drops. • Substitute. If the item you want to buy does not fit your budget, think about similar but less expensive alternatives. • Shop around different outlets before making your actual purchase. This is paramount especially if you realize you have been spending a lot on a particular item or if you are making a big purchase. It is also smart to avoid convenient stores as they can be more expensive. • Watch out for special offers. This could be a nice way of saving money. However, you need to work out on weather you will actually be saving on the deal. Also check on the expiry date. This could make a difference especially if you are buying edibles. • Compare prices of different brands. In most cases different brands package their products differently. It is important to compare the pricing just to save on some few shillings. Also read customer and expert reviews on the products you’re interested in. • Use prepaid or loyalty cards. Prepaid cards eliminate the need of carrying cash and give you the convenience of shopping at any outlet of your choice. Loyalty cards on the other hand allow you to be rewarded points that can be used to purchase items at discount.

hopping is essential but can be stressful at times. Sometimes we buy the things we need, want but sometimes we buy the things we do not need and maybe on impulse. There are many ways of escaping the startling marketer’s gimmicks as a protection against imprudent shopping. Here are simple tips on how to budget and manage your money while shopping. • Write a budget plan and keep a spending diary. This is the most reliable approach of prioritizing your needs, it helps in keeping track of your expenditure. • Write a shopping list. This ensures that you stay focused on the shopping task. • Only bring the cash you need. You can not spend cash you do not have. This will limit you from overspending and will make your shopping spree more purposeful. • Time your purchase. A little advanced planning could save you a lot. Waiting to buy something until you need

INSIGHT CONSUMER | MARCH - MAY, 2015

• Shop online. Online retailing provides you with a wide selection of products at your own convenience and at a cheaper price. You only need to select the items u need from a website of your choice and make the purchase. This saves you time and energy since you do not have to go to the retail store, deal with crowds and standing in line. Everyone is looking to save as much money as they can and at the same time get the best deal. This simple ways will enable you to cut cost in little ways therefore, achieving big savings without making big sacrifices. Considering more careful purchasing should be your habit.

SHOPPERS INSIGHT

CASHLESS SHOPPING

aving not to carry cash around feels convenient and secure. Imagine a cashless society where everything is electronic, payments and transactions done on a digital platform and we see the end of notes and coins in our daily businesses. Well, as the rest of the world gears to this huge change, Kenyans are not being left behind. Statistics reveal that 27 per cent of Kenyans have wholly adopted the cashless system for settling bills, buying goods and paying for various services at restaurants, transport among others. With the number rising sharply due to reliable mobile phone cash transactions and credit card, moving toward a cash-light strategy may have multiple benefits and improvement in financial management and security. 1. It controls spending and helps to manage finances. It also ensures that you spend exactly what you have purchased for. There is no need for change therefore escaping sweets as your change balance especially when there is a coin shortage.

queuing lines and it also eliminates miscounting errors since there is no manual counting. 4. Bouncing cheques will be a thing of the past. Availability of funds will be checked instantly when the purchase is made to ensure that there is sufficient amount in a customer’s account.

“Cashless shopping enhances your security risk exposure”

The closed system which only allows an individual to access the pin codes to his mobile phone and credit cards diminishes the threat of fraudsters and counterfeit currency. Cashless mode of payment system is more organized and well structured. Prices are standard and do not fluctuate upon seasons and peak hours especially for fare. Cashless forms are electronically friendly and can be monitored allowing tracking of sales and aids in recovery procedures especially in fraudulent situations. It also helps to remit taxes to KRA accordingly because of the use of statements, receipts, delivery notes, and invoices. It is therefore, prudent to say that cashless retailing is the way to go.

2. Virtual money reduces the vulnerability of theft or loss. The dangers of physical transportation of money escorted by security personnel in armored convoy will be a thing of the past. 3. Cashless purchasing is not time consuming. Cashless tills operate faster thus reducing the INSIGHT CONSUMER | MARCH - MAY, 2015

ASSOCIATION HIGHLIGHT

What is digital Migration?

igital transition is moving from analogue broadcasting to digital broadcasting. Digital broadcasting is transmitted frequencies through terrestrial space. The primary difference of digital broadcasting is the use of multiplex transmitters to allow reception of multiple channels on a single frequency range (such as a UHF or VHF channel) known as sub-channels. Analogue television on the other hand, requires a large amount of bandwidth to transmit sound and picture. The advent of digital technologies is facilitating increased convergence between broadcasting, telecommunications and the internet. It is now possible for different types of content (audio, video, and text) to be stored in the same format and delivered through a wide variety of technologies (computers, mobile phones, televisions, etc.).

Digital broadcasting brings with it the following benefits: Better picture quality – sharper, brighter picture and improved sound quality. More choice programmes digital signals and therefore, broadcasted.

– availability of more and services because take up less bandwidth more channels can be

More access - The Set Top Box (STB) which will be used to receive the digital signal also has the capability to interface with devices such as a cell phone, memory card or internet modem. This will provide viewers with access to many more services and information. Better viewing pleasure - With analogue you are only able to have standard definition television. With Digital Broadcasting High definition television is possible. High Definition Television is the premium version of digital television, offering picture and sound quality which is much better than today’s analog television. The reason is that it offers up to twice the vertical and horizontal resolution of a traditional analog (PAL) signal. The higher resolution picture is particularly suited to large screen television displays.

This means that the benefits of HDTV are particularly noticeable on larger screen sets and when using projection equipment. HDTV will be in widescreen format and provide cinema-quality viewing with Dolby surround sound.

Extending coverage in Vernacular Language - Digital broadcasting offers the possibility of more channels which can include those in vernacular language. This thus will give the government the platform to create local content.

Electronic Program Guides (EPGs) Electronic Programme Guides (EPGs) are a feature of digital television broadcasting that come fitted in the Set Top Box. An Electronic Program Guide (EPGs) can be used by viewers to navigate between channels, identify the currently screening program and the next program (‘now and next’) on each channel.

Viewers will be able to receive digital transmission from digital set top boxes. A set-top box is a device that enables a television set to become a user interface to the Internet and also enables a television set to receive and decode digital television (DTV) broadcasts.

More sophisticated EPGs can be used to set reminders for program viewing, provide a short synopsis of the content of programs, identify programming in advance for several days, search for programs by genre, and provide access to some enhancements among others. Better utilization of frequencies - A digital signal carries much more data than an analogue signal. Therefore, more than one channel of television programs can be broadcast at the same time. This is known as multi-channeling. This efficient utilization of channels reduces the number of frequencies required for the broadcasting sector. The CCK is therefore able to deploy the unused frequencies for use in other services.

INSIGHT CONSUMER | MARCH - MAY, 2015

However, the process has also been having challenges, this include; 1. The cost of the set-top boxes The challenge for African Government and regulators is that the digital transition contains a number of potential negatives: the biggest hurdle is the cost of set-top boxes to receive digital TV signals. In order to get digital transmissions, their citizens will either have to buy a set-top box or a digital television. 2. Paying for new channels Furthermore, new TV channels will have to be paid for, by consumers themselves (through Pay TV subscriptions), by the Government (through the state broadcaster) and by advertisers (through new Free-To-Air channels). Although with the right incentives African governments can increase investment and jobs in the local TV sector.

ONLINE RETAILING

Parinaz Firozi: Breaking physical retail dominance in Kenya

he was born and raised up in Mumbai, India the comfort her parents run to a decade ago to escape religious persecution in Iran. At 11, they moved again to Houston Texas closer to her father’s new workstation.

And at 16, she was a waitress at a club in Texas working between 4pm and 10pm to balance between school and work earning a minimum wage plus tips from generous revellers. At 25, she moved to Europe for her MBA and back to Texas later to work for the JP Morgan as a syndicated leveraged Finance analyst. She would however spend the summer of 2013 in Kenya working at the International Finance Corporation (part of World Bank). Unknown to her, in May 2014, she would move back into Kenya the country she fell in love with as the Managing Director of Kenya’s leading online retailer, Jumia. Since then, she embarked on a journey to break the physical retail dominance and to help bridge the gap between offline and online retail. In July 2014, she oversaw the successful launch of the online marketplace a platform that would see local and international small, medium and large enterprises move to sell on the company’s website and establish virtual shops. 4 months shy of its first anniversary, the online marketplace seems to be the catalyst Kenya’s retail missed. First seen as a threat to physical retail, the platform has proved to be a blessing in disguise. Hundreds of merchants have moved their businesses online the company’s website opening virtual shops in an expansion bid. International brands like Microsoft, Infinix, Innjoo and Crown among others have also used the platform as a launch pad for their new model brands. “The success of the online platform is as a result of Jumia’s countrywide distribution channel. Companies and individuals have realised that they can open their shops 24/7 all over Kenya and have their products delivered

to their customers anywhere in this country,” Parinaz Firozi, MD Jumia. For sellers on the platform, Jumia charges an agreed commission only for items sold, if a merchant doesn’t sell, they do not pay. The best thing about the platform is that sellers get to be exempted from charges such as County council charges, Rent, wages and salaries as one doesn’t need employees, Risks like fire and looting and insurances against such. However as Parinaz notes, Many are yet to understand the model. “All you need is have the items, they should be new, unboxed and with all warranty details. You will need to take images of them from various dimensions and post using the seller centre another platform that allows you to monitor your stock.” According to Parinaz, the seller centre is an easy to use platform and training is conducted on the sellers to ensure they have full knowledge on its use. “Sellers are able to set their prices too. As a matter of fact, with the exemption of so many costs, it’s inevitable to offer the INSIGHT

best prices for products and still make a huge profit since there is an increase in sales. That is how Jumia manages to offer the best prices in town.” As the onslaught on physical retail continues with SME’s continuously coming on-board the online marketplace, Firozi’s quest to break physical retail dominance is fast becoming a reality and a blessing to hundreds of retailers who are now able to bridge the gap between offline and online. And not just that with local brands such as BATA, Text book Centre, Armco, Nairobi Sports House, Sangyug among hundreds of others onboard the platform, Kenyans can still find their favourite brands shipped on their doorstep in the stress-free, secure and convenient experience. On her remarks, Firozi says, “It’s still a tip of the iceberg, a mere stab on an elephant, the potential of online marketplace sky scalable.” She hopes all physical merchants will have moved online by the time she moves to another continent. Till then a digital retail Kenya remains her dream. CONSUMER | MARCH - MAY, 2015

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