7 January 2013

Ethiopia: Profitable Canvassing of Events Circuit

Most people are now regularly visit the street side bazaars in Arat kilo area to do some essential shopping.

Eyob Demissie, 29, was in the business of renting plates, kitchen materials and other materials for weddings, graduations, funeral ceremonies and exhibitions, with his aunt, Hirut Gugsa, from 1997.

Hirut quit the business, in favour of designing clothes, in 2008.

"That time was the turning point for my business, even though it had difficulties," Eyob said. "Financial shortages, lack of experience and market uncertainty were the foremost challenges I faced."

In 2008, Eyob was impressed by a picture he saw on the Internet of a tent inDubai. Inspired, he decided he wanted to go into the tent business. He imported tent canvases and accessories, such as base plates and poles. Each tent cost him 4,000 Br for the canvas and 3,000 Br for the poles. He began renting tents in 2008, with eight 36sqm tents.

Seeing the profits he made from the rental and sale of his tents, he imported enough material, in 2010, for 100 tents. He then opened two offices, in Bole and Kera, naming the business 'Eyob Demissie Tent Rental and Tent Work'. Currently he has 300 tents, varying in size from nine to 36sqm.

Presently he has rented 121 of the 36sqm tents to seven districts in Addis Abeba, for the pre-Christmas Small & Micro Enterprises Bazaar, organised at the wereda level.

Such bazaars are organised by districts, throughout the year, on several occasions, including major holidays. The purpose of these exhibitions is to create a market link for enterprises, enabling them to introduce themselves and their products.

With the exclusion of Yeka and Bole, weredas under eight other districts are a part of the current bazaars. These two districts are not participating due to budget problems, according to Brehanu Zewdu, market expert at the Addis Abeba Small & Micro Enterprises Bureau.

Each wereda organises different bazaars. Arada District has two bazaars at Arat Kilo, for seven enterprises, and at Piazza, for three enterprises.

Eyob has been renting his tents to enterprises since 2010, when his clients included vendors only from bazaars at Kasanchis and Saris.

"But after two years, I was able to get involved with at least seven districts," Eyob said.

Eyob has increased his rent revenue, by adding tents and renting to a larger number of bazaar vendors, at higher prices.

There were 880 enterprises that took part in the Christmas bazaar last year, according to Brehanu Zewdu. This Christmas, 960 enterprises are taking part.

These Enterprises come from manufacturing, construction and service sectors.

Abesha Wood Work Enterprise, registered in Arada district, is using the bazaar to promote its products.

"We do not expect people to buy from us this holiday, as they have different expenses," the coordinator of Abesha says. "But when people come to buy other products, they may see ours too, and make plans for future purchases."

Eyob is expecting to make 200,000 Br to 250,000 Br this season. He rents tents for 350 Br to 500 Br to weredas. A big discount from the 950 Br to 1,150 Br he earns from other events, such as weddings.

The street side bazaars, organised by the administrations of the 10 districts of the city for the numerous small and micro enterprises (SMEs), probably draw as many people are creating opportunities for businessmen like Eyob.

"Weredas and districts use my tents at least five times a year for different events," he said, explaining why he gave such a sizeable discount.

Eyob is happy that seven of eight districts rely on his tents, although not all weredas in each district were using his tents. Currently the price of a 6 by 6 metre tent is 32,000 Br, twice that of 2010.

Although his profits are growing, he says, his costs are too.

When he started his business, he spent 4,500 Br for the canvas of a 36sqm tent; now that is up to 8,600Br.

Sales for the businesses, functioning under Eyob's tents, are also growing. Idget Besira Enterprise, near Buna Board, onDebre Zeit Road, had 700 Br to 950 Br daily sales three years ago. Now that is up to between 1,600 Br and 2,000 Br, says Beletu Tassew, theEnterprise's secretary. They sell ground red pepper (berbere) and ground peas (shiro) for 75 Br and 80 Br; a big difference from the 60 Br and 65 Br price tag at the Leghare Bazaar.

"I believe the cause for the price difference between commodities is the content," Beletu says.

The districts do not have as many participants as they had expected. Arada's 10 districts were each supposed to have 12 enterprises participating. But only Wereda 7 has managed that. Some enterprises, says Alemayehu Tena, market officer of Wereda 7, believe that taking part in the bazaars is a waste of time.

Participants in Arada District each contributed 104 Br to pay for parking, security and music; raising a total of 18,580Br.

Wereda 7, of Kirkos District, charged participants from the wereda 500 Br, and those from other weredas 1,000Br.

The City is considering how weredas can get a budget for bazaars, so that enterprises could participate for free.

Eyob has also rented his tents for city's day celebrations, in Mekelle, in 2010, and Addis Abeba, in 2012. The town ofMekellerented 50 tents from him and 130 were used in Addis Abeba.

Eyob plans to have an event's hall, for which he is trying to acquire land from districts.

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