Battle for retail business hots up as Chinese traders eye pie of local market

When China Square opened its first store in 2023 at Unicity Mall, along Thika Road in Kiambu County, the whole of Kamkunji, Nyamakima, and Gikomba trading community was up in arms.

The then Investments, Trade and Industry Cabinet Secretary Moses Kuria and former Deputy President Rigathi Gachagua vowed to fight for the Kenyan traders whose livelihoods were at risk. Then months later, Shiquo HiiStyle emerged, rattling the status quo even more.

It aggressively advertised on social media the products it imported right from the source in China, at prices that made customers believe they had been taken advantage of for a long time. 

The wave was unstoppable, as the tide finally hit the mainland with even more stores mimicking the same model as China Square, opening up in the city, and more sellers riding on Shiquo HiiStyle’s way of selling to increase earnings.

While these imports from China have no doubt unsettled the small and medium-scale traders, eating into their profits, major retailers say these stores are complementary.

In some cases, where e-commerce is concerned, it is more of a different playing field rather than leveling it.

When this question was posed to Naivas Supermarkets Ltd Chief of Strategy  Andreas von Paleske, he said any retailer that offers customers a better price point and selection does a good thing.

“That is what I would say about competition,” he told Enterprise in an interview. “In terms of how it would impact us, I think we are driven by consumer trends. If there are products or price points that work particularly well with our customers, we are willing to adopt them.”

Decorative items

Paleske, however, noted that the main driver of Naivas’ business is the grocery side, an area that China Square and the likes do not venture into, which still gives them an edge in the market.

“The mainstay of our business really is the grocery side of things…your daily, weekly, monthly food, health and beauty shopping…electronics definitely,” he said.

“I think some of the retailers that are opening outlets are very complementary to us. They offer something we do not offer and vice versa.”

Naivas is the country’s leading retailer with 110 stores.

China Square now has seven stores and sells predominantly housewares such as kitchen utensils, decorative items.

However, there are other stores such as China Village at Signature Mall, Mombasa Road, and importing retailers such as Shiquo HiiStyle who may be more of a threat to China Square than to Naivas.

But these stores can be a threat to the e-commerce side of retail business, at least to some extent, according to Jumia East Africa Regional Chief Executive Vinod Goel.

“I must admit, yes, it’s a type of competition,” he says, maintaining that their main competition, however, is physical stores.

“Is it much of a threat? As I told you, our biggest issue is not that. Our biggest issue is if more and more customers start to be online and buy online,” he says. He states that, unlike other markets, Kenya’s share of e-commerce in the retail space is two per cent.

“We are at two per cent. The moment I get another two per cent, my business will have doubled. Our worry does not lie in other people opening businesses,” says Goel.

He says the opportunity in the retail space is so huge as more people go digital.

He said the opening of a physical store has its own challenges, which his business does not have to deal with, and that becomes an edge.

For example, the capital for opening a store is more, considering that you also have to store the items you intend to sell. “We don’t have that problem,” he says.

Goel argues that if they were to expand their business, the scale does not increase operating costs, which is different from if one were operating a physical store.

“In physical, every time you want to enter a new city, you need to invest a lot,” he says.

“What do we do if we want to open in Lamu? Just open a pick-up station. The cost of the pick-up station is only when the item is delivered, and the customer pays.”

Of the countries in the Far East, Kenya imports the most from China.

The figure stood at Sh576.1 billion in 2024, according to the 2025 Economic Survey by the Kenya National Bureau of Statistics (KNBS).

The report states that the value of imports from Asia increased by 3.5 per cent from Sh1.74 trillion in 2023 to Sh1.80 trillion in 2024.

“Asia remained the dominant source market for Kenya, accounting for 66.4 per cent of the country’s total import expenditure in the period under review. The growth was largely driven by increased imports from China (25.5 per cent), Malaysia (12.8 per cent), Pakistan (75.3 per cent) and Oman, which more than doubled,” the report says.

In the six months to June this year, Kenya imported Sh304.7 billion worth of goods from China, according to KNBS.

“The leading import partners in June 2025 were China, the United Arab Emirates, and India, with import values of Sh55.1 billion, Sh26.7 billion, and Sh21.6 billion, respectively,” KNBS says in its economic indicators publication.