Mzungu who quit Dubai job to sell ‘mitumba’ items in Gikomba
Benjamin Gsell, 26, was born in Vienna, Austria, and developed an interest in entrepreneurship at an early age.
“I started out selling computer accessories while still in school, and explored other opportunities upon graduation. My goal back then was to find business opportunities in Africa or the Middle East,” he says.
The Middle East worked out sooner, with Ben getting a job in Dubai that gave him experience in operations, marketing and business development. But after five years, he decided to go back into entrepreneurship.
He, however, put his plans on the back burner for a little while so he could travel. One of his destinations was Kenya.
“While visiting Nairobi for the first time in March 2017 and driving through the city, I was stunned by the proliferation of second-hand clothes along the streets,” Benjamin says.
Impressed by the potential he saw in the mitumba business, he started researching to figure out how to get a slice of the pie. In September last year, he relocated to Kenya, and the following month, opened his first shop. He tells Hustle how he’s broken into the industry.
What made you go from working in Dubai to selling mitumba in Kenya?
I was fascinated by Africa, and Kenya in particular. After working for almost seven years in the corporate world, I had the chance to interact with a lot of start-ups, either mentoring them or investing in them. So after some time, I decided to apply the knowledge and experience I’d gained to start my own business.
I have three shops in Nairobi’s Gikomba market, with most of my containers offloaded in Donholm. I sell my products to wholesalers looking to buy up to 100 bales – though, depending on the size of the bales, I can sell up to 10 bales at wholesale prices.
I sell a bale at Sh4,000 to Sh19,000, depending on what’s inside, as well as sell some items on retail to boost profits.
How much did you start with?
My capital was around Sh5.5 million, which I raised from savings and my American business partner, whom I met while in Dubai.
Why did you decide to operate from Kenya?
In my opinion, Kenya has the most investor-friendly framework and the biggest market for the mitumba business in East Africa. I also think there’s political stability and the language barrier is not an issue here as English is spoken everywhere.
Where do you get your inventory from, and how do you bring it into the country?
Currently, I’m sourcing and sorting my clothes from the UK. The stock comes via ship to Mombasa and then via SGR to Nairobi.
When I started out, I’d initially import clothes from several sorting plants, but then I discovered that to ensure we have consistent quality, we had to sort the clothes ourselves. We’re in the construction phase of opening our own factory in Romania, but for now we’re only sourcing for high-quality clothes from the UK.
What barriers did you face in understanding the Kenyan market?
There were a few challenges in the beginning, including finding reliable and trustworthy partners. Another barrier was market entry – how would we get people to trust and buy our products?
Mitumba traders are well known so most customers stick to what they know. However, we overcame this obstacle by providing excellent quality and pricing, as well as making deliveries within Nairobi.
We still experience some problems, such as delays at the port and SGR, as well as the collection of payment because of low money circulation, but this was worse earlier on.
Didn’t the discussions around banning of second-hand clothes in Kenya discourage you from setting up your business?
I was aware of discussions around banning mitumba, but the Government has been talking about doing this for years and never implemented it. It’s also clear that many households in Kenya make a living from the sale of second-hand clothes.
As long as the Government isn’t providing any alternatives to bridge and provide jobs for the almost two million people who are directly or indirectly making money out of mitumba, I don’t see any concerns in the near future.
Who are your biggest competitors?
There are some very well established people in the industry who have very strong distribution channels and many years of experience. These are my biggest competitors. However, I have a big advantage because I source and pack my clothes in-house, and there are only a handful companies in the market positioned like I am.
How is business is doing so far?
The business is going well so far – obviously with a few hitches, particularly during the election period. However, I’m still very bullish as there’s a lack of good quality products in the market.
We’re also looking to optimise the supply chain and open wholesale shops or identify key wholesalers to partner with in places like Kisumu, Nakuru, Eldoret and Migori.
We also want to expand into other East African countries, such as Tanzania and Uganda, as well into key markets in West Africa, like Ghana, Benin, Togo and Nigeria, in 2019.
By Mumbi Kinyua