Why Direct To Customer Is Not Necessarily A good Idea In Africa Especially With FMG
In Kenya’s dynamic consumer goods market, many businesses are drawn to the idea of selling directly to customers, believing it will maximize profits and create stronger brand loyalty.
However, when it comes to Fast-Moving Consumer Goods (FMCG), this approach often presents more challenges than benefits. Instead, partnering with local distributors has proven to be a more effective strategy for market penetration and business growth.
1. Faster Market Penetration
Unlike direct-to-customer (D2C) sales, working with distributors allows brands to tap into already established networks.
Distributors have long-standing relationships with retailers, supermarkets, pharmacies, and wholesalers, ensuring that products reach consumers quickly and efficiently. This eliminates the lengthy and costly process of building a direct sales channel from scratch.
2. Lower Operational Costs
Running a direct sales model requires significant investment in warehousing, logistics, and staffing. Companies must set up distribution centers, hire and train sales teams, and manage inventory flow, all of which can be costly. Distributors, on the other hand, already have the necessary infrastructure, enabling businesses to scale without incurring these expenses.
3. Regulatory and Compliance Support
Kenya’s import and licensing regulations can be complex, particularly for new entrants in the FMCG sector. A reputable distributor ensures compliance with regulatory requirements, reducing the risk of legal hurdles and product clearance delays. This streamlines market entry and allows businesses to focus on growth instead of bureaucracy.
4. Deeper Local Market Expertise
Consumer preferences, pricing strategies, and purchasing behaviors vary widely across different regions in Kenya. Distributors have a strong understanding of local trends, helping brands position their products effectively. They also provide insights into the competitive landscape, allowing businesses to refine their marketing and pricing strategies for better results.
5. Efficient Logistics and Distribution Channels
Kenya’s infrastructure challenges, including road networks and supply chain inefficiencies, make last-mile delivery a significant hurdle for direct sales models.
Distributors specialize in navigating these challenges, ensuring products reach stores and customers in a timely manner. This is especially important for perishable and high-turnover FMCG products.
The Bottom Line
While the direct-to-customer model may work well in certain industries, it is not always the best choice for FMCG brands in Kenya.
Leveraging the expertise, networks, and infrastructure of established distributors offers a more sustainable and cost-effective path to success. For businesses looking to scale in Kenya and beyond, strategic distribution partnerships remain the key to long-term market dominance.
