Gift Services Business Plan
Gift Services Business Plan
Gift Services Business Plan Overview
This is a Gift Services Business Plan to the standard Gift Services Business.
Gift services in Nairobi and generally in Kenya are essentially facilities linking suppliers with consumers, same way as neighborhood kiosks, online shops or supermarkets would do. The difference is in the branding; the ability to take every day items package and present them as ‘gifts’.
For instance one Gift Service Business has taken an assortment of chocolates which can be bought over the counter in a supermarket, wrapped them creatively in a box, put some ribbons and named the package the “I’m Sorry gift hamper”, with the tagline “The best way to show remorse”. The price is 160% that of a supermarket.
The consumer who purchases the gift may or may not know the price of the same products in the supermarket. At that particular point price will be secondary to the ability to express the particular remorse. The emotion supersedes any concerns about price. And that is what makes Gift Services different from other shops; the ability to stress the emotional element of any item, and make money out of it. ‘Basically the gift services are saying hey look, you would lift your friends or relatives spirit if you gave them this item. Trust us, we know it.’ This applies both for corporate and individual gift services.
It’s important to note that among the Gift Services operating in Kenya, only a few make original items to offer as gifts; mainly bakers and craftspeople. The rest purchase items from various local or foreign sources, package, brand and sell.
There are over 510 gift services operating in Nairobi. This figure includes shops both online and offline which have made efforts to brand themselves as Gift Services. The figure could be higher considering nowadays that there are many services operating informally, sometimes only serving a small group of friends or institutions. The figure does not include traditional shops like curio dealers, Maasai market vendors, supermarkets and individual importers who offer items without branding as “gifts” though there are consumers who will buy and give to other as gifts.
In the online space of which this report is biased towards we counted 96 shops. These run through websites, Facebook pages, online classifieds, Pinterest and other forums where they are able to display their items and talk about themselves.
Competition in the business has been increasing. Around 64% of the online shops have come up in the last 3 years. Competition will continue to increase. This is because the barriers to entry in the business are low. There are services which have started with Kshs.3000. They invest in a Face book page, list small affordable items and source only when they receive an order. Others don’t even have a Facebook page but advertise through online classifieds and Facebook groups.
Demand for gift services is also increasing. Though traditionally in Kenya there hasn’t been an entrenched gift giving culture that is changing. A more sophisticated group of consumers is emerging. By socialization, education, exposure through television and the internet these consumers have developed advanced tastes. With some internalizing habits such as gift giving.
These are the consumers who have or attend white weddings, numerous parties and mark hitherto uncelebrated days like Mother’s Day, Father’s Day and even Halloween. The increase in demand has simultaneously led to a rise in the number of gift services.
About 6 years ago one of the biggest barriers to running an effective gift service was the logistics and cost of delivery. However with the growth in the number of courier and errand services operating at different levels and within different locations logistics are not as much a headache as before. Opportunities still abound in the market. With product differentiation and clever marketing anyone can penetrate the Gift Services market at an individual and corporate level.
Download Gift Services Business Plan / guidehere