South African And Nigerian Cities To Be Outgrown By Kenyan

Kenyan cities are tipped to register the highest growth rates in consumer spending over the next 15 years, outpacing the Nigeria, South Africa and Cameroon metropolises.

Research firm Euromonitor International in a new report covering 24 cities projects that consumer expenditure in Kisumu will rise by 277 per cent from $0.6 billion (Sh60.6 billion) in 2015 to $2.2 billion (Sh228 billion) in 2030 at the equivalent of last year’s prices.

The Kenyan lakeside city is followed by Mombasa whose consumer spending is forecast to rise 221 per cent from $1.6 billion (Sh161.6 billion) to $5.1 billion (Sh518.7 billion) over the same period as per the Euromonitor projections.

Nairobi is third with a predicted 208 per cent expansion rate in consumer expenditure from $5.6 billion (Sh565.6 billion) to $17.2 billion (Sh1.7 trillion).

The anticipated growth rates mean Kenya’s cities are expected to be more attractive to businesses dealing in consumer goods and services compared to other leading African cities.

The local cities are followed by Cameroon’s Yaoundé, Nigeria’s Abuja and Cameroon’s Douala whose consumption is forecast to rise by 172 per cent, 170 per cent and 134 per cent from the current levels of $4.6 billion, $9.6 billion and $4.2 billion respectively.

While Kenyan cities are poised to register the fastest growth in consumption over the review period, the report notes that they are relatively poorer than those in Nigeria and South Africa that have larger absolute consumer spending.

“In contrast, Kenyan cities are relatively poorer. Yet on the positive side, the country’s relatively high Internet usage paves the way for innovative, tech-savvy solutions,” says the Euromonitor report.

“E-commerce companies and tech entrepreneurs will find Kenyan cities particularly appealing.”

The majority of the households, about 92 per cent in Nairobi, Mombasa and Kisumu have an annual income of between zero and $10,000 (Sh1 million).

About six per cent earn between $10,000 (Sh1 million) and $25,000 (Sh2.5 million), with two per cent having an income of more than $25,000 (Sh2.5 million).

The report notes that consumers in the Kenyan cities spend most of their money on basic goods and services including food, transport, housing and leisure.

Food is the largest expenditure item, accounting for 44.3 per cent of Kisumu’s consumer spending, 39.5 per cent of Mombasa’s and 35.1 per cent of Nairobi’s.

Several international food brands have entered Nairobi over the past few years, targeting demand from the growing middle class whose tastes have partly been shaped by global travel. These include Kentucky Fried Chicken, Pizza Hut, and Subway.

MONGOLIA: Burger King Opened First Store In Mongolia,

Burger King has opened its first store in sparsely populated Mongolia, joining companies from Pizza Hut to Porsche in anticipating an economic boom from the Oyu Tolgoi copper and gold mine.

Sandwiched between China and Russia, Mongolia has long been dependent on mining and animal herding and still has no McDonald's or Starbucks. But it has begun to see an influx of foreign fast food and other brands. KFC came in 2013, then Pizza Hut last year, and now the world's second-largest burger chain.

The interest in the country of 3 million people comes despite a deep deceleration in growth rates to about 3 percent in the first half of this year from 17.5 percent earlier in the decade. However, after years of deadlock over taxes and royalties, a deal reached in May between the government and mining giant Rio Tinto over the $5.4 billion Oyu Tolgoi mine could help spur renewed growth.

"Now is a good time to be coming in," said Jim Dwyer, executive director of the Business Council of Mongolia.

On the edge of Chinggis Square in the capital Ulaanbaatar, luxury brands Louis Vuitton and Ermenegildo Zegna already have set up boutiques. While these stores are largely empty now, they and others are banking that better times will come.

International car brands that have trickled into Mongolia include Volkswagen and BMW. Porsche opened a showroom in Ulaanbaatar in February with models ranging in price from $70,000 to $300,000.

Jason Broome, in charge of Porsche's Mongolia business, said the local franchise now serves 30 customers.

Burger King has partnered with Mongolian franchisee, Max Group, one of the country's largest conglomerates, engaged in mining, food and beverage, agriculture and real estate. Meal prices range from about $2.5 to $5.5, less than 1 percent of the average monthly salary of $734.

Media company worker Banzragch brought his son to the launch of the Burger King store because he remembered sampling the chain's food overseas and being happy with both the taste and the price.

"Even during harder economic times like now, the price is reasonable," Banzragch, who gave only one name, said at the outlet that opened earlier this month in a busy commercial district of Ulaanbaatar.

Max Group President Ganbaatar Dagvadorj said it plans to open 10 Burger King stores in Ulaanbaatar and then expand elsewhere in the country.

"By bringing Burger King here, we are providing jobs for hundreds of people and looking to expand it to employ thousands," Ganbaatar said.

Also at the launch was student Nyamdavaa, who said she first went to a Burger King while studying in France. "It tastes as good here as it did there," she said.