Reminiscent of the global conglomerate Walmart, which operates 4,600 stores in the United States alone, Naivas Ltd. is looking to ensure its branches are spread across the East African country.
Similar to Walmart’s strategy of saturating markets with thousands of store locations to dominate retail access and convenience, Naivas is pursuing a statewide expansion to solidify its position as Kenya’s top supermarket brand.
Andreas von Paleske, chief executive officer, made the company’s intentions known, stating, “If you look at the rate of urbanization, especially in Nairobi, the density of residential areas and the need for basic services such as retail, I suspect that number may grow over time.”
The original Mukuha family owns the remaining portion of Naivas, with IBL Ltd. owning 51%.
Owned by Mauritius’ biggest conglomerate, Naivas currently operates 111 shops across Kenya.
“We still see a lot of opportunity to grow in the market. Many areas are either unserved or underserved by Naivas,” Andreas von Paleske added.
Following the debut of its shopping app last year, online purchases now account for more than 10% of total sales, demonstrating a similar blend of e-commerce and in-store convenience that has allowed Walmart to maintain its market dominance in the United States.
According to the company’s CEO, Naivas intends to grow its revenue at a rate of 10% to 15% in the future after averaging 15% yearly in recent years. Sales totaled 114.5 billion shillings ($886 million) during the previous fiscal year.
As seen on Bloomberg, the CEO also noted that the most popular item at Naivas is milk, followed by fresh fruit.
Naivas’ emphasis on cost, ease, and consumer accessibility, all hallmarks of Walmart’s success, underlines its desire to become Kenya’s equivalent of the retail behemoth.
As Von Paleske pointed out, people are growing more price-conscious, and Naivas is marketing itself as the go-to store for everyday needs like milk and fresh fruit, similar to Walmart’s emphasis on household necessities.
Walmart’s push in Africa
U.S. retail giant Walmart said in September that it would establish its first Walmart-branded stores in South Africa before the year runs out, expanding its presence in the country where it already owns local retail group Massmart.
While Walmart has been operating in South Africa for years through its completely owned subsidiary Massmart, which operates brands such as Makro, Game, and Builders Warehouse, the company has, up until recently, never opened stores under its own name.
In October, Walmart announced that it had officially unveiled its first Walmart-branded store in South Africa.
The store, located in Fourways Mall, Johannesburg, replaced the previous Game branch.
Walmart’s move comes in a fiercely competitive market controlled by Shoprite, Woolworths, Pick & Pay, SPAR, and others.
