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Business was good for a few in spite of the Covid-19 crisis

BUSINESS
By Peter Theuri | March 10th 2021
Maurice Ouko, a nurse at Rift Valley Provincial General Hospital (PGH) in Nakuru, prepares a Covid-19 vaccine before he administers it to a healthworker at the facility on March 8, 2021. [Kipsang Joseph, Standard]

Numerous stories have been told about the devastation caused by Covid-19 pandemic in the past 12 months.

The recovery plans formulated in 2020 have been compared to the Spanish flu pandemic of 1918 that killed millions worldwide.

Many companies collapsed last year. Thousands of employees had to make do with salary cuts and reduced wages as others were laid off.

But perhaps what is not appreciated is that other companies were started or had their fortunes boosted, thanks to the pandemic.

Rivatex, the company President Uhuru Kenyatta praised for designing his trademark shirts, was back in the public eye after being given the task of making desperately needed masks.

The Moi University-owned textile manufacturer was revived by the government in 2019 in a Sh5 billion turn-around plan, but it was not until the pandemic that the real Rivatex showed up.

Managing Director Thomas Kipkurgat, in April last year said that they produced 8,400 masks in a day.

“As a textile facility, we have embarked on production of masks.

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"Everything is running smoothly and we expect to produce enough to help in the fight against this pandemic,” Prof Kipkurgat told The Standard.

It was not only Rivatex that benefited from the mass production of masks.

Other tailoring firms emerged, with everyday tailors eagerly producing masks in bulk.

As the hospitality and tourism industry floundered, with government statistics revealing weak performance for the better part of the year, small eateries thrived.

COVID-19 by the numbers. [Graphics: The Standard]

Ballooning costs

A quarterly report on the gross domestic product showed that the accommodation and food services sector contributed Sh4.28 billion in the second quarter of 2020.

This was less than a quarter of the Sh18 billion it had accounted for in the first quarter, and less than a third of its contribution in a similar quarter in 2019.

As the bigger hotels closed down because of ballooning overhead costs and restrictions on travel, smaller food service providers thrived.

Moses Kiiru, a 21-year-old who owns fast-food joint Moh Wingz in Kilimani, Nairobi, says the collapse of  established hotels made his business thrive.

"Some of the people who used to eat in the big places realised that they could get the same quality from us, and at lower prices.

"You see, even earnings were affected and people wanted to spend less on quality food," Kiiru says.

The tourism industry was also hit and companies were forced to restructure their operations.

They had to find ways of surviving after restrictions on international travel locked tourists out of the country.

In January, Tourism and Wildlife Cabinet Secretary Najib Balala said that the tourism sector lost Sh130 billion last year.

The decline in revenue, he added, was attributed to low occupancy rates, cancelled trips, and disruption in foreign and local travel.

Outside the box

To survive, tour companies took an entirely different approach.

"There were suddenly no international tourists. We had to think outside the box as tourists still wanted the experience of touring the Kenyan jungle," says Sensational Adventures chief executive James Matindi.

And think outside the box he did.

Matindi was cruising through the dusty roads of Nairobi National Park with a cameraman, a Zoom connection and a livestream to tourists around the globe.

Online tourism was now the way to go, with people in far places able to follow even the annual wildebeest migration.

That almost every activity was going online proved valuable for digital sellers. 

Global online selling platform Amazon was doing well as brick-and-mortar businesses struggled.

In July, Reuters reported that Amazon had posted "the biggest profit in its 26-year history as online sales and its lucrative business supporting third-party merchants surged during the coronavirus pandemic.

“While rival brick-and-mortar retailers have had to shut stores during government-imposed lockdowns, Amazon hired 175,000 people in recent months and saw demand for its services soar. The company said revenue jumped 40 per cent from a year earlier to $88.9 billion (Sh9.8 trillion),” wrote Reuters.

E-commerce platform AfricaSokoni chief executive Ebrima Fatty said that the year presented the company with a huge challenge as demand hit an all-time high.

“It was an extraordinary year for us at AfricaSokoni.

"It was a year of innovation, customer obsession, employee obsession, brand-building, consolidation, pivoting, increase in product offerings and building partnerships,” said Fatty.

According to Moses Kemibaro, the founder and chief executive of Dotsavvy Ltd, a digital business agency that provides integrated digital business solutions, some of the e-commerce platforms saw their sales triple during the pandemic.

“E-commerce increased, with some companies creating their online platforms. Consequently, volumes increased tremendously,” Kemibaro said.

Social media platforms

As online demand grew, companies had to find a way to deliver their wares.

They employed the services of transporters, especially motorcyclists, whose numbers in Nairobi increased as they were contracted to deliver goods.

Companies and individuals that import and sell through social media platforms thrived and developed into reputable businesses that catered for the high number of customers who had embraced online shopping.

For entertainers, 2020 was the year to take creativity online.

As entertainment joints closed down, stand-up comedians and other artistes went online to attract viewers.

Comedian Eric Omondi said this was the way to go as those who made the transition reaped handsomely.

"Covid-19 was like a blessing in disguise.

"There was a lot happening in the digital space and taking advantage of the situation was beneficial to many comedians.”

On the whole, it was an unforgettable year — one where lives were lost in numbers and economies shrunk.

On the flip-side, it was a year when some people thrived and companies bucked the trend to turn a profit.

Covid 19 Time Series

 

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