Online business is the new girl in Kenya and anyone who does not embrace the new trend is going to perish. It is the new way the world is doing business. It is the new way the world is exchanging goods and services.
... And if you don't believe me, watch how supermarkets are closing down and how online stores are smiling all the way to the bank! Ask Jumia, now listed in New York Stock Exchange!
Watch supermarkets sales plummet. Keep reading…
So, in my last article, I talked about how to reveal hot-selling products online. I got a lot of good responses that motivated me to get to the next question: –
There are 3 main industries that will always do well but you still can fail miserably in these industries. There are others but these are the main ones.
These are businesses that deal well-being of a human beings. Understanding this section well will help you make much more sense of the next section about recession-proof businesses. In this niche, you see businesses like: –
Trust me, a woman will still wear her favorite lipstick. The sick will seek treatment, even if it means giving up everything. It is just the way life works!
Businesses that focus on building other people's wealth or improving their financial well-being always do well. Some of the businesses in this category prey on human greed and exploit weaknesses.
Examples of these businesses in Kenya include: –
While cultural diversity and complexity in African culture make online dating look unconventional, relationship-related businesses will always thrive.
See below about First Mover Advantage. Example subcategories of these businesses include: –
Did I just contradict myself? ... No, I didn't. You DO NOT pick a niche, you CREATE your own in a crowded market!
The commonest mistake most people make in Kenya is doing what everyone else is doing. When you hear your neighbor is selling Mituba shoes and making good money, we all run into the used shoe business.
Do not pick what others are doing, rather, create your own market in a crowded market.
To avoid failing in business, knowing the three main areas that will always make money mentioned above, the best thing to do it….
We all know there is money to be made in health-related businesses. Of course, there are several barriers to entry in healthcare businesses.
Barriers to entry are those obstacles that prevent new businesses from entering a certain business niche. These include Government restrictions, high startup costs, proprietary property, know-how or academic requirements, and technology.
Example, a heart surgeon in business is cushioned by education level/know-how from any possible competition.
But there are so many areas in the beauty & healthcare business one can fit in and make a killing out of without worrying about competition.
Everyone who has ever been in healthcare dreams about opening a clinic or a pharmacy. You find that there are so many pharmacies in Kenya that they have become more than MPESA shops.
Of course, they are making a living out of them but only a few major players are making millions out of this. The market has been spread thin and profit margins are declining.
Unless you come up with disruptive innovation in the pharmacy and clinic business, this market is overcrowded.
In one of the previous articles, I mentioned something about the beauty products business where I mentioned lipstick examples. The truth is, beauty rewards a woman positively. A compliment to the looks of a woman about the lipstick she wore guarantees a lifetime lipstick wearer. It’s that powerful.
Keep reading before you get into the cosmetics business…
But now, that doesn’t mean there is no competition in the beauty world. It is fierce and brutal. In the same niche, there are still billions of shillings to be made by those who are willing to get in and be different from everyone else.
The most lucrative business acquisitions in Kenya are in the beauty industry. Why? Because this is a rewards industry. No one wears makeup to look ugly. You can quote me on this every day
Beauty is an industry of rewards. No one wears makeup to look ugly!
See Nice & Lovely Acquisition by L’oreal.
Those who are willing to be unique. Create your own market where no one else is competing with you. Certainly, Nice & Lovely was not selling imitations from China.
Giving a few examples of unique business ideas in the beauty world, I will ask you a few questions and let you respond: Leave a comment at the end of this article.
Ready to Explore? Answer These Questions!
Before I get myself in trouble with the few in such businesses for spilling their beans, let me leave the cosmetics business alone. These were just a few examples.
You get the point though.
If you cannot beat the high barriers to entry, be unique and do something no one else is doing… and you will be fine.
Think about Jane Mukami fitness
Jane Mukami took her passion for fitness to become a thriving business. Jane does not own some heavy metal, heavy capital gyms across Kenya. In fact, she is becoming a globally recognized fitness expert making sales from all over the world.
If you tried to copy Jane Mukami Fitness, you will fail like an idiot – seriously.
She found a unique way of not only training and inspiring women in fitness but also walking the walk with them. Showing them how to eat right and lose weight. Like a religion, Jane has created a tribe of fitness enthusiasts in a crowded niche.
She did not focus on selling some magic forever-living pills on Facebook!
There are businesses that are known to be recession-proof. These businesses thrive in good and bad times economically. You are unlikely to go wrong in these businesses. These are:
These are businesses that are perceived to be making money by exploiting human weaknesses and frailties. Addictive products top the list of sin businesses. Some of the top-known sin businesses include:
The rich will always get their favorite bottle of fine wine – even when maize flour goes missing :-). The rich will always fly in choppers even when sugar costs double and everyone is hurting. People taking care of the luxurious spenders will always be in business.
The cosmetics business is not purely recession-proof but one of those businesses that seem to have multiple properties that make them thrive during hard times.
Cosmetics form habits that are hard to break. They make the user feel better, more beautiful, more accepted, etc. These properties make them thrive during hard times.
Getting sick is not anyone’s choice. The question is, can the sick afford health care even during a recession? Can sickness wait until the recession is over? Unfortunately, we get sicker as poverty strikes harder. Healthcare businesses that thrive during recessions are those that are luxury-related such as:
These are especially lucrative in career education. These businesses thrive by giving hope to the poor and hurting that good times are ahead. During hard economic times in Kenya, businesses such as USA visa coaching, International schools application, career training, etc. experience a surge in business.
Why is this? Leave a comment below - Can't wait to read what you think!
Business and taxes must be done. These are times governments try to squeeze every cent they can get from their citizens. Tax accountants remain in business.
The recession times are not the time to buy new. It is time to maintain and repair the existing. These are the times when you want to repair your phone's broken screen rather than get a new one.
Unfortunately, most of us focus on making profits from the very first sale. It is the wrong approach in business. You should focus on providing so much value for little or FREE and money will follow.
If you are the first one to get into a market niche, you stand to profit more and faster before everyone else jumps on the bandwagon.
Example: No one is about to take down Safaricom or Jumia in their spaces. The reason is, they were the first movers in their niches and took a massive lead ahead of their competitors.
Assume you want to become the leader in the essential oils & aromatherapy business in Kenya. You can profit by educating the masses about aromatherapy for free, having a cheap entry product that appeals masses, and upselling your more expensive products.
Who’s Taking Advantage of E-commerce in Kenya?
It troubles me to see Jumia (Nigerians & Europeans) and Kilimall (Chinese) taking the lion’s share of these virgin and lucrative new grounds. Where are we – Kenyans?
Another Nigerian company a few weeks ago opened offices in Nairobi ready to take advantage of these Kenyan ripe low-hanging fruits.
Are you going to sit there and watch?
I have seen university students embracing e-commerce become self-reliant even before graduating from college. I have seen doctors quit what everyone would call lucrative jobs to do e-commerce full-time.
We have helped many to earn a living and put bread on the table. This drives us to Kentex Cargo.
What’s the future of e-commerce in Kenya?
With over 23 million Kenyans with internet access from their smartphones, e-commerce can only get bigger in Kenya.
It is estimated that e-commerce business in Kenya is only less than 3% of all tangible goods-related businesses in Kenya. The other 97% is still being done the traditional way.
Ever heard that Nairobi is owned by wazees from Murang’a?🤣
It seems these men from Murang’a had a first-mover advantage and bought Nairobi at cheap prices. Today, they milk these benefits by charging some crazy fees called goodwill charges.
I hate those goodwill fees. I pay you money for bringing you money? Please!
Well, e-commerce is headed in that direction and those with internet virtual real estate will do well. This is a prediction, not a fact.
Premium e-commerce names might soon become city-center properties.
I will give you a few examples and let your imaginations go wild.
Assuming you are in healthcare as a physiotherapist. There are 2,000+ physiotherapists graduating every year from colleges in Kenya. Can you make a business out of this? If you could, what if you owned a website called physiotherapy.co.ke? (someone took this domain recently but it has been vacant for a while)
I know I could make a thriving business out of this name. Make it the most known name in physical therapy and rehabilitation.
Think about...
Just to make you see the potential;
There are about 4,000 road accident fatalities in Kenya per year. Per every fatality, there are 52 people who get disabled (severity varies).
4,000 x 52 = 208,000 possible disabilities per year.
If physiotherapy.co.ke took a market share of only 0.5% of this number, that would translate to 1040 potential clients per year. That’s good business.
This is just accident-related rehabilitation, not counting the majority of disabilities caused by other diseases.
If this makes sense to you, think about your specialty and how you can take city center property while they still last.
Leave me a comment below on what is on your mind!
The good thing is, like the Murang’a men who bought Nairobi cheaply back in the day, the internet is still new in Africa. These business names will in the future become much more valuable than they are today. They are easy to remember, they are relevant to the needs of the customers and they are available and cheap.
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Cheers
Greg
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Nice information Greg, I have read both of your blogs and they are very informative. I honestly would like to get to know you IRL. I am always looking for mentors people who see things as i do. Currently in college but my hunger for entrepreneurship back home is killing me, but again gret info
Thank you Tervin for checking out our blog. More coming soon
If you can reach out to me I would highly appreciate it
Very informative information especially to me. I want to venture into beauty and cosmetics and spa business but i feel stuck in a way
It is probably one of the best areas to venture into. You should forge forward
Great tips!
But one thing I dislike about Kenyans is that they don't experiment and don't like supporting their people or products.
As a designer, I only get clients from the US and other countries but none from Kenya.
I have contacted them I tell you but they see you like garbage!
Maybe these tips will work. But Kenyans generally, most of them, are so close-minded and don't think of the future.
I will continue tapping into the international market but Kenya, naah.. They can make you lose hope, literally... It's sad, especially since it's the youth mostly who are the future.