Covid: Kenyan family businesses expect higher sales this year – KBC

Majority of family-owned businesses in Kenya expect sales to rise in 2021 after COVID-19 pandemic affected consumer demand last year.

According to the latest Family Business Survey by PricewaterhouseCoopers, 52% of the respondents said they are experiencing sales growth while 28% said they have witnessed sales reduction due to the pandemic.

Family business in Kenya however look more optimistic about future growth when compared to the region where 46% of family businesses said they are experiencing growth and 31% seeing a sales reduction.

“The pandemic and public health measures like curfews and social distancing put pressure on the manufacturing sector and reduced demand for non-essential health services. The decline in foot-fall in shopping centres and other public areas affected the retail sector, and the shift to remote learning impacted the education sector,” said Sunny Vikram, Associate Director Pwc Kenya.

Over the next two years, 76% of the respondents in Kenya indicated the desire to expand to new markets compared to 69% of the respondents in East Africa region, while 58% intend to introduce new products and services.

“Many businesses, including Kenya’s family businesses, responded to this economic pressure by cutting costs and streamlining operations. Family businesses have a long history as drivers of job creation and economic output and now, looking ahead, they are optimistic with 66% expecting growth in 2021 and 96% in 2022. Having become even more resilient during the pandemic, their sights are firmly set on the future,” added Vikram.

With inconveniences brought about by COVID-19, majority of family businesses have indicated their intention to invest new technologies going forward.
56% of firms said they intend to increase the use of new technologies while 53% said they plan to Improve their digital capabilities.

“Disruption tends to reveal which businesses have made more progress on their digital journeys, and which were then able to transition to new ways of working more readily and seamlessly. Now is the time to act. Those businesses that have not made digitalisation a priority and have not made progress will face significant challenges in protecting their legacy,” noted Michael Mugasa, Partner and Entrepreneurial & Private Business Leader PwC Kenya.

However, according to the survey only 16% of the respondents running family enterprises have a robust, documented and communicated succession plan in place.

“Up-and-coming generations of family business owners need time to decide how best to make an impact. Their interest in the business should not be assumed, but it can be cultivated over time,” added Mugasa.

The survey was conducted late last year with responses from 96 family business owners in Kenya, Uganda, Tanzania and Rwanda.