(Bloomberg) -- Hennessy, the world's largest maker of cognac, has started distributing its products in Kenya to tap Africa's second-largest luxury-goods market.
The company, a unit of Paris-based LVMH, began distributing its products in the Kenyan capital in May and plans to use the city as a hub for regional distribution, Chief Executive Officer Bernard Peillon said in an interview in Nairobi. A bottle of Hennessy cognac retails for as much as 117,000 shillings ($1,127) in the city's shops, the company said.
“Kenya is a boost market, the next emerging market frontier for us,” Peillon said. The company is targeting “double-digit” sales growth, he said, without specifying targets.
Kenya was Africa's second-largest market for luxury goods in 2016, with revenue of about $500 million, up 25 percent from a year earlier, according to a report by New World Wealth, a Johannesburg-based research group. The country ranked behind South Africa's $2.3 billion market and ahead of Nigeria, it said. Brands like Hennessy are expanding their reach on the continent to tap into growing numbers of middle-class and rich people.
Kenya, where luxury brands including Bentley, Porsche and Rolex are already available, has 9,400 dollar millionaires, the fourth-highest number behind South Africa, Egypt and Nigeria, according to the New World Wealth report.
About 7,500 new millionaires will emerge over the next decade in the East African nation, the third-fastest pace on the continent after Ethiopia and Mauritius, according to the 2017 Wealth Report compiled by London-based Knight Frank.
Hennessy sells cognac in 140 countries, including South Africa and in Nigeria. While the continent is experiencing double-digit revenue growth, it accounts for less than 10 percent of the global market, Peillon said.
“Our role is to figure out what might happen in the world, to have a vision of what could become of Kenya, and we are positive,” Peillon said. “I am here in Kenya, so it is a clear sign of commitment and of interest.”
To contact the reporter on this story: Samuel Gebre in Nairobi at sgebre@bloomberg.net.
To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Helen Nyambura-Mwaura
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
