Switching towards Sea Cargo from Air Cargo, The Fashion Retailer expands business
The Fashion retailer Deacons in Nairobi, East Africa has been struggling for a long time ago to cut their costs through any mean. Now they are finding the way how to get rid from huge expenses. They have targeted big plans to reduce their shipping costs. The plans are too big in their economic view that they reduce the cargo costs to 80%. They totally shifted airlifting cargo to sea transport.
What Peter Njoka, Deacons Chairman Said?
Deacon has already experienced a big cost saving by delivering their products direct to the customers rather than going through South Africa. The Deacon’s chairman said, “We are seeing out transport costs reduce by up to 80% on the Dubai-China route”. He also said that their decision of skipping the air Cargo via South Africa and moving it through sea has already reduced 50% of cargo cost. By doing this, they will surely get better position to compete on pricing with its rivals in the fashion retail sector.
Deacons Plans after Cost Cutting
A cost deduction up to 80% in any sector means you have added profit wings with you. The same is the case with the fashion retailer. After smartly planning cost cutting, they planned to open new outlets away from Nairobi by doing rental agreements. Eldoret, Kisumu and Meru are their next target markets.
Muchiri Wahome, the retailer’s chief executive said, “we will go in as soon as the malls are completed”. Furthermore, he also explained that it is not possible to reveal which store will open first because the decision depends on completion dates from real estate developers.
The retailer’s chief executive has also explained that they are working to increase the outlet numbers to 66 after the big cost saving from air cargo.
The smart decisions from Deacons are made after smart planning of Air cargo cost cuttings. That’s why they are able to expand their business to the new horizons.
