The rise of China Square, located at the Unicity Mall near Kenyatta University in Kenya, has been nothing short of controversial.
Owned by Chinese businessman Lei Cheng,according to Nation.Africa, the store has driven Kenyan traders out of business with low-priced goods, leading to protests and backlash from Trade Cabinet Secretary Moses Kuria.
Despite this, Cheng maintains that his business model is friendly and appeals to many Kenyans who are suffering under the high cost of living.
Cheng’s journey to Kenya began in September of 2022 when he visited the country for the first time.
He instantly fell in love with Kenya but was surprised to find that most of the cheap items he knew very well, imported from his home country of China, were priced as premium.
He saw a business opportunity and flew back home to China to enlist the help of some suppliers in setting up a base in Kenya. This gave birth to China Square, which opened on January 29, 2023.
In the first two weeks of business, Cheng made sales worth Sh 20 million, and his daily sales volumes have more than doubled since then thanks to genius market pricing, social media marketing, and referral clients.
Cheng says that his business model is ethical and serves the customers, who have been his biggest referral.
He claims that he is not exploiting Kenyans in pricing, but rather offering them basic items at lower prices than what they have been previously subjected to by other businessmen.
Cheng’s business has employed 130 people so far, and he has already started working with local companies that have approached him for partnership.
He cites the huge traffic the shop has generated to the once-dull UniCity Mall that is now brimming with business.
The mall had been operating at just 10% occupancy after being snubbed by local supermarkets that quietly withdrew after noticing it did not attract foot traffic.
When a reporter from Nation visited the mall, it was almost full, with queues stretching meters away, and the parking lot was also full, forcing motorists to wait in long queues.
Despite the success of his business, Cheng has faced protests and backlash from Kenyan traders who accuse him of slashing prices by almost half, thereby cutting them off from the market.
The traders’ complaints reached Trade Cabinet Secretary Moses Kuria, who proposed that the university should buy out Cheng’s lease and hand it over to Gikomba, Nyamakima, Muthurwa, and Eastleigh traders and edge China Square out of business.
However, Cheng says that his business is legal and centred on healthy competition, and he has cooperated with all government directives for opening a business in Kenya.
He argues that the people who are fighting him feel threatened because Kenyans now know that his business exists and that he is not exploiting them in pricing.
Cheng was very shocked to read Kuria’s utterances on social media saying that when he was applying for the licenses, nowhere was he told that “Chinese are not allowed to do business in Kenya.”
Cheng believes that Kenya is a very good country, and its people are very friendly.
He reasoned that Kuria’s outburst may heavily slow down foreign investments in Kenya, and the minister should support ethical businesses like the one he has that create opportunities for Kenyans and pay huge taxes to the government.
Deputy President Rigathi Gachagua recently convened a meeting to avert a planned strike by Gikomba traders in what they termed as unfair competition from Chinese traders.
The strike was expected to take place on Wednesday next week, but the talks seem to have cooled off the traders. Mr. Gachagua said after the meeting that they have agreed to have further consultations with more members on Wednesday, March 1, next week towards sustainable solutions to the issues affecting these small-scale traders- who are on the lower side