October 2011

Kenya Water Market Survey

Introduction

Governments, development agencies and nonprofit organizations have made significant investments in water infrastructure, yet water scarcity and contamination remain widespread in developing countries. This contributes to both socioeconomic and health burdens. Globally, waterborne diseases are a leading cause of death among children under five, killing more infants than HIV/AIDS, malaria, and tuberculosis combined (Black, 2003).


A flourishing industry of independent, small-scale water providers is filling the gap in traditional water services in most developing countries (Kariuki & Schwartz, 2005). Despite a common perception that this sector exploits low-income consumers, studies in Asia, Africa, and Latin America suggest that, in many instances, these businesses provide essential and equitable services (McIntosh, 2004, Collignon & Vezina, 2000, and Solo, 2003).
In Southeast Asia, for example, a small-scale water treatment and vending industry has emerged to provide safe drinking water to consumers who cannot obtain clean water from network sources. This business model

originally developed in response to demand for cheaper bottled water among middle- and upper-income urban households. The industry’s rapid growth over the last decade, which is estimated to have reached over 3,000 businesses in metropolitan Manila and about 2,500 in Jakarta and surrounding areas, suggests that demand for purified drinking water in the region is extending into lower-income groups (Aquaya, 2009). According to a recent consumer study in Indonesian cities, the percentage of poor households that rely on non-branded purified drinking water ranges from 20 percent in Jakarta to 60 percent in Palembang (WASPOLA, 2007).


In Kenya, water-treatment kiosks targeting middle-and high-income consumers are emerging. This market brief provides an overview of the Kenyan market, and reviews evidence on the potential for such business models to deliver safe, affordable drinking water to low-income segments. This research was conducted by the Aquaya Institute for its Water Business KitsTM program (see box below), which is being developed in partnership with IFC’s Sanitation and Safe Water for All program.

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