Cheap imports

How Kenyan entrepreneurs can compete against cheap imports

The fight against cheap imports largely depends on moves by the Government; even so there are little moves that entrepreneurs can make to ease the pain.

It is nice that from time to time Kenyan MPs make headlines fighting for a noble cause. Noble cause here meaning the reason they were elected in the first place. Some of them have recently been fighting against cheap imports from China; Tilapia imports that are pricing out local fishermen.

We already know the effects of this kind of thing. Kenya is apparently one of Africa’s top prospects yet we barely have a textile industry. The fish imported into Kenya, from China, is selling at sh. 30; against a local price in the regions of sh. 100 to sh. 200.

To win this war, much of the battles rest on the Governments shoulders. But they too have their hands tied. Not only is China financing our future with Soviet-scale projects but the WTO discourages us from making the same moves that made rich countries rich.

READ: IS STARTING A BUSINESS WITH YOUR HUSBAND A GOOD IDEA?

Don’t be distraught (you should have been distraught). Entrepreneurs are resilient and in this context too they are ways for them to stay afloat. The typical reaction to lower prices by the competition is lowering your prices as well. This has been called out as being a bad move. Firms engaging in price wars usually have the scale to cover for cutting their prices. So what should you do?

Compete on your terms; non-pricing strategies. Have a look at your value proposition and sell it again. Beyond price, why is your product different? Once you communicate this to your customers you will have struck gold. I know, it’s so easy to write about it. Let’s try it again. There are three pillars of competitive advantage. Now, instead of focusing on price shift your mindset towards quality and/or services.

Another thing you should not do is ignore your customers (repeat customers, that’s what this word means in Kenya). It is cheaper to maintain the customers you have than try and woo first time customers to stick around. When the cheap imports come they’ll find you have a clique of loyal customers who value the relationship you’ve built with them.

Whether you are small manufacturer or involved in handicraft you can still compete against Asia’s export economies and their cheap imports. The Government will eventually come help you out (it will), stay focused on what you can do.