18 March 2017

Kenya: Nairobi Listed As a Leading Destination of Consumer Goods

Nairobi — Nairobi is the leading destination for Fast Moving Consumer Goods companies off the Fortune 500 companies and tends to be the top choice for organisations looking to service Eastern Africa.

This is according to a new report released by Infomineo which reveals how increasingly important the Middle East Africa (MEA) region has become for the majority of global Fortune 500 countries. The report focuses on multinationals looking at entering, or already present, in the Middle East and Africa region.

According to the study, apart from Nairobi, other leading destinations on the Fortune 500 list include Dubai, Johannesburg, Casablanca, Lagos and Cairo.

Dubai and Johannesburg are the most popular hubs overall, but both Casablanca and Nairobi are rapidly gaining traction and international awareness.

Casablanca has the highest growth rate overall, while Dubai has the highest count.

"The same can be said for London, which has tripled its number of regional Head Quarters in the region, acting as an MEA hub. Given the geographical proximity and the talent pool present in the city, it could be that London is playing the role of a first step into the MEA region, especially for Japanese and North American companies," says the study.

Egypt remains behind the leaders due to political instability; however, it has seen a 250 percent increase in Fortune 500 investment since 2015. Germany and France are leading in terms of coverage rate while China has the lowest presence in the region.

The criteria for choosing

Local market potential, maturity of the industry, existing competitors, political stability and the quality of the employment market, among others, are what companies consider while selecting a specific city.

"Determining the attractiveness of a location along these clear lines assures the Fortune 500 companies of a stable and profitable investment and significantly mitigates risk."

According to the study, the most attractive cities are Dubai, Johannesburg, Casablanca and Nairobi, and at the lower end of the spectrum, Cairo, Paris, Algiers and Cape Town.

Further, industry type is also looked at during the selection of a city and country.

Financial services, for instance, are more likely to base MEA coverage from London, while technology companies are more inclined towards Casablanca or Lagos. Lagos is also the premier location for organisations looking to manage their operations across Western Africa with 12 Fortune 500 companies already established in the region.

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