Kenya has become the leading PAYG market in Africa. All big players are present in Kenya. But all of them are international companies: the mother company in Europe, India, China or US makes the strategic decisions and gets funding, while the local branch is responsible for the last mile distribution. Kenya is entirely occupied by the international PAYG companies.
Well, not entirely… One local company still is not a branch of an international company, but majority owned by a Kenyan entrepreneur: SunTransfer Kenya Ltd., founded in 2009 by Gathu Kirubi.
The company is selling Solar-Home-Systems with PAYG finance and has build one of the strongest sales network through rural Solar-Centers. Each Solar-Center is driven by technicians, sales people and credit specialists. The main products are Solar-TV, Solar-Home-Systems and solar water pumps.
But how can a local company survive in between all these international companies who are raising millions of Dollars as grants and loans to build their businesses?
Kirubi’s answer is very clear: "There are two key factors: First and most important is to focus on distribution only without the burden of also being a manufacturer. This gives us much more flexibility in product selection and also we don’t have to raise lot of money for expensive product development. We also can react on customers demands much faster: We just look for the top-quality products available in the market and then include it into our portfolio for last mile distribution. "
Another advantage for us as a local company is that decisions are made from our local management team and not outside Kenya. In consequence the decision making process is fast and very close to the customers needs."
And what is the other key?
"Second is to diversify your business. All the other companies are pure PAYG companies, selling PAYG mass products. This is very helpful for the marekt and we do the same. But we don’t want to be a PAYG company only. Therefore we limit this part of our business and add others."
You are limiting your PAYG-business, why?
"To reduce our business risk and to make a difference from all the international PAYG companies. As a pure Kenyan company we have to find market sectors others cannot serve as well as a local company. For example customized solutions for resorts, schools etc. Also the backup-market is growing fast in Kenya due to the unreliability of the grid power. Solar water heating is another emerging market we shall tap into."
Diversification in distribution as the key factor for success?
"Yes! SunTransfer Kenya has a strong network of rural Solar-Centers with experienced staff and also a big customer database of households with credit history: why not sell other products and services than just SHS or PAYG-products? We can offer manufacturers a reliable last-mile-distribution network – not only for solar products."
You mentioned the advantages of being a local company, but what are the disadvantages?
"We dont have the same big budget and manpower for corporate branding and marketing like the international companies. This limits our visibility for manufacturers and investors. But to solve this disadvantage the solar entrepreneur network "Sendea" has been extremely helpful: Sendea gave us not only to access investors and manufacturers, but also brings local entrepreneurs in East Africa together. To share our experience with entrepreneurs in Uganda and even Asia helped us a lot to improve our business and find the right way in our Kenyan market."
Last question: What shall the brand SunTransfer stand for in your vision?
"SunTransfer should be the Kenyan brand with the best after-sales-service. Our customer should know: If you buy a product from SunTransfer, you are on the safe side and your customer experience will be quite high: first the product is selected carefully, second you get a professional and best after-sales-service."
Gathu Kirubi PhD is CEO of SunTransfer Kenya Investments Ltd.