Early this month, a store called Chinatown at Lugogo Mall in Kampala opened its doors to the public. This was followed by so much buzz around the country, with multitudes of people flocking to the place as early as 6 am and making long queues throughout the day at the prospect of buying goods at low prices.
Thus, many of you are excited about the Chinatown concept with huge debates and content creation on social media platforms like TikTok, X (formerly Twitter) and Facebook. The question at hand is: what exactly is the concept of Chinatown, and what are its implications for the existing business entities in the country?
Oxford Dictionaries define Chinatown as a district of any non-Asian town, especially a city or seaport, where the population is predominantly of Chinese origin.
However, we all agree this is not the modern-case meaning. The old understanding of Chinatown has now taken a different tune of music; the new Chinatown is a goods place for sale of Chinese products in Lugogo stores. We are speaking about business, competition, and its impact on our economy as a country.
We are looking at the law and the idea of domestic products that face a threat of profit loss due to cheap products that everyday continue to storm China Town, a place or space in Uganda, lugogo stores. It was also a case in Kenya, though closed. Chinatown is a dynamically developed worldwide.
Early this month, on 3rd September, 2024, The Daily Monitor ran a story that “China Town store steals show with cheap products”. The article indicated that the selves had strictly Chinese electronics, fabrics, kitchenware, sports equipment, and furniture, among others.
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies (see Li, Rita Yi Man; Li, Yi Lut (1 June 2013).
“The Role of Competition Law (Act): An Asian Perspective. This law basically evolved to maintain fair competition in markets. It is essential to protect markets and to also make more productive economies.
Under Uganda’s Competition Act, Cap 66, this was Uganda’s first ever national law on competition. The purpose of the Act is to promote and sustain fair competition in markets in Uganda; to prevent practices having an adverse effect on competition in markets in Uganda; and for related matters.
Section 2 of the Act provides the object of Act (a) to promote the efficiency, adaptability, and development of the Ugandan economy;(b) to provide consumers and producers with competitive prices and product choices;(c) to promote employment and advance the socio-economic welfare of Ugandans;
(d) to provide opportunities for the participation of Ugandans in the world market and recognize the role of foreign competition in Uganda; and(e) to guarantee that all persons have an equitable opportunity to participate in the economy.
It is also a third law under Section 8 of the Competition Act. After consultation with the technical committee, the Minister has the powers to direct an enterprise to cease and desist from any anti-competitive practice. We should ask ourselves: was Chinatown acting in line with good faith, or was it some anti-competitive practice?
One will ask. What are the anti-competitive practices under the law?
Anti-competitive practice or anti-competitive agreements, as per Section 3, include a practice or agreement that involves the taking of a decision or engaging in any concerted action or concerted practice in respect of production, distribution, supply, or control of goods or the provision of services that causes or is likely to cause an adverse effect on competition.
We admit the fact that for the few days the country has learned about Chinatown, there has been tension and outcry from various traders heard all over the city, downtown or uptown.
In conclusion, the impact of Chinatown was felt by several traders, and it undermined the profit-making in those few days, which leaves local traders and other domestic goods at stake. The Minister should come out and enlighten more on this situation; otherwise, the once-seen small impact may have a long-term impact, as discussed in my next article on EFRIS.
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