The Present Situation:
If you
live in Kerugoya and your fridge gets damaged, then you have to start asking
your friends if they know any fridge repair technicians. It's likely they
aren’t aware but will ask around. So you wait.
One
friend remembers seeing a small signboard nailed to a tree that read
"Fridge repair" along with a number. However, he didn't take notice
of the number and can't remember where the tree was located.
So you
might be tempted to go to the fundi wa radio. There is at least one of these
along each street. Your technician claims he can repair your fridge and boasts
of having repaired tens of them. "Fridges these days are causing a lot of
trouble." Can he come to your house and check it out? "I can, but I
don't have anyone to leave the shop with." So you have to figure out how
to get the fridge to his shop.
You
feel uncomfortable leaving the fridge, but the technician says, "I'll finish
this TV first." If he is the reckless type, he will get to the fridge and,
by trial and error, try to figure out what is wrong. This won’t end well.
If he
is more decent but crafty, he will try to find a technician who is
knowledgeable in fridges to come and look at it. Perhaps they can fix it, and
the fundi wa radio can claim the bragging rights and a share of the fee you
pay. But then, the hired technician might not be that good.
This
is the situation in many growing towns in the counties (think peri-urban towns
outside the major cities).
If you
were in Nairobi and not Kerugoya you wouldn't go through the same experience. A
simple Google search would reveal several household appliance repair
businesses, and the signboards on trees would be numerous.
That
said, the situation is gradually changing. Household appliance businesses are
starting to appear in the bigger county towns, but the market is not fully
served yet.
Context
Interest in household items
repair services
In
January the following were the average monthly Google searches for phrases
related to household appliances;
|
Phrase
|
Volumes
|
|
washing machine
repair in Nairobi |
1200 |
|
cooker repair in
Nairobi |
800 |
|
fridge repair near
me |
250 |
|
fridge not cooling
but light is on |
150 |
|
Fridge |
4400 |
|
fridge repair in
Nairobi |
600 |
|
fridge repair near
me |
250 |
|
fridge repair |
150 |
|
ac and heating
repair services |
300 |
|
washing machine
repair near me |
250 |
|
dishwasher repair in
Nairobi |
200 |
|
samsung repair shop
Nairobi |
200 |
|
washing machine
repair |
200 |
|
appliance repair |
100 |
|
elba cooker repair
in Nairobi |
90 |
|
|
|
Source: Similar web
·
According
to the World Bank, in 2018 Kenya imported 125, 429 fridges for household use.
Anecdotal evidence shows the number has been growing.
·
Warranty-based
repairs only last for a certain duration.
·
Additionally,
the number of second-hand appliances, both imported and from local sources, has
increased; these offer no warranties.
·
Many
individual and small-scale sellers of equipment exist, offering no after-sales
service.
·
The
range of brands has also expanded, ranging from low to high quality. Lower-end
brands break down more often, with limited support.
·
Repair
services are location-based; consumers typically seek repairs from the nearest
trustworthy shops.
·
Cookers
and fridges are now standard in many urban mid-income households, with cookers
also common in lower-income households.
·
Washing
machines are increasingly common due to lower prices and lifestyle changes.
·
Cookers
are also being adopted by many low-income consumers.
·
These
appliances do not break down frequently, perhaps once every two years on
average. However, due to their high numbers, there is a demand for repair and
maintenance services.
·
Few
established repair shops exist outside major towns, as breakdowns are
infrequent.
·
Consumers
often only consider fridge repair when a breakdown occurs and may have
difficulty finding a suitable repair shop.
·
Google
searches for repair services may yield results that are geographically distant.
·
Due
to the bulkiness of the equipment, consumers prefer in-house repairs over
transporting them to a repair shop.
·
Sometimes,
consumers seek part replacements rather than full repair services, such as a
knob or tray, to fix appliances themselves.
·
Due
to infrequent purchases, there is a lack of knowledge about trustworthy repair
services, leading to consumer suspicion.
·
Lack
of proper repair shops in most locations, both within and outside Nairobi, is a
significant issue.
·
There
is minimal proactive marketing to create awareness, build trust, and establish
brand authority.
·
Existing
business models have room for improvement.
·
Monthly
searches for repair services indicate a significant marketing opportunity.
The Opportunity
The opportunity lies in
establishing a household appliances repair shop in the larger or emerging
county towns or in new or expanding residential areas. These locations have a
high density of equipment but lack a proper specialized repair center.
The shop could offer in-house
calls, addressing a major barrier to using repair services—the need to transport
the equipment to a repair shop.
The shop will distinguish
itself through skilled technicians, adherence to service level agreements,
adaptation to customer needs, and providing a professional experience that
instills confidence.
The advantages the business will have over the existing competition include:
·
Establishing a presence in underserved areas.
·
Implementing
better marketing strategies.
·
Exploring
the possibility of a more effective business model.
·
Utilizing
content to build long-term trust and awareness.
How it Would Work
a). Obtain a premises and
establish a shop.
Setting
up a shop essentially involves acquiring a space, equipment, and branding as a
shop specializing in appliances such as fridges, washing machines, microwaves,
and other household appliances.
b). Acquire skilled manpower.
You
can have one skilled repair person managing the shop and establish a network of
others whom you can call in as needed.
c). Implement a system to prevent
exploitation by technicians and to minimize revenue leaks.
Product Characteristics
-
Great
service
-
Strict
adherence to SLAs
-
Skilled
professional technicians
-
Mobile
services
-
Updated
on household appliances.
What Exists
Players
-
Individual technicians.
-
Brand service centers.
-
Specialized repair services –
E.g. https://www.fridgerepair.co.ke/
-
General all-rounded repair
services
-
Lead generation services. These
work to rank high on Google for relevant phrases. For instance, “Fridge repair
in Kerugoya”. When you contact them they link you up with a local fundi or from
a nearby town. The fundi pays them a commission. For instance, https://bestcare.co.ke
Market Characteristics
-
Fragmented.
-
No
dominant players or proper market leaders.
-
Many
underserved areas.
-
Increasing
number of self-taught technicians.
-
Efforts
towards formalization of repair services.
-
Many
equipment sellers.
-
Influx
of second hand ex uk , ex- other equipment.
-
Wide
range of quality.
-
Mixed
experiences with brand warranties.
-
Minimal
marketing of repair services.
-
No
price competition because consumer is not properly informed and infrequency of
purchase.
The Consumer
-
Consumer
often not aware of repair services until problem exists.
-
Consumer online actively searching for repair
services a
-
High
purchase intent.
-
Most
likely to settle on service a little randomly, trial and error or minimal trust
factors.
-
Consumers
also seeking information from friends.
-
Consumer
poorly informed on maintenance of equipment.
-
To
most consumer equipment looks complex.
Process
-
Identify
possible area to set up.
-
Identify
possible technicians to assist in market understanding.
-
Identify
technicians to offer the actual services.
-
Identify
the equipment required for minimal and effective set up.
-
Set
up a website, a strong online presence.
-
Advertise
both on and offline.
Marketing
The
most effective options for marketing would be:
-
Small
signboards outside or next to residential estates.
-
Door
to door giving of business cards or bronchures.
-
Street
activation services. For instance, free information clinics where consumer can
ask and get information on various aspects of household appliance
-
Google
ad words.
-
Search
engine optimization.
-
Video
platforms.
-
Social
media content.
Revenue Model
Fees
charged to customers for repair and maintenance services.
Sale
of spare parts and accessories
Back of The Envelope Calculations
Average
service fee per customer – Kshshs.2000
Commission
due to fundi – 30 %
No.
of customers per month – 60
Total
revenue – 60* Kshs.2000 = Kshs. 120,000
Fundi’s
commission (30%) – Kshs. 36,000
Gross
profit: Kshs. 120,000 – Kshs. 48,000 = Kshs. 84,000
Major
Expenses: Rent, Marketing
Challenges
ü
Securing reliable technicians
who possess the necessary skills and professionalism.
ü
Establishing trust with
customers, particularly in a competitive market.
ü
Navigating the initial months
before reaching the breakeven point.
ü
Managing marketing expenses
effectively to ensure maximum impact and return on investment.
ü
Dealing with potential regulatory
hurdles and compliance issues.
Haters
Objection: It’s rare for fridges and
cookers to get damaged easily
Counter: Sue but there are big enough
numbers so there is a fridge or cooker getting damaged every day.
Objection: People won’t take their appliance
to a fundi they are not familiar with
Counter: We will set up in a way that
instills confidence from the start. And
when we are the only option or better option in the market the consumer won’t
have any option. We won’t take advantage of this.
Objection: Get fundis skilled in fridges
huko mashinani will be difficult.
Counter: Well, there might be some
challenges. But there is bound to be some within reasonable distance. Once we
get one they can exercise their networks to get more.
Critical Success Factors
ü
Selecting
the right location for the shop's establishment.
ü
Recruiting
skilled technicians proficient in appliance repairs.
ü
Establishing
trust with customers through reliable services and transparent communication.
ü
Implementing
effective marketing strategies to attract and retain customers.
ü
Maintaining
flexibility and speed in responding to customer needs and preferences.
What do you think ? Please leave a comment below.
Interesting
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