Despite being around 5 to 10 years later than the west, the world of e-commerce is becoming increasingly competitive in the MENA region. Basil Al Khattab brings us up to speed.
The peerless success of online business worldwide is hardly deniable today. With a relatively young, technology-aware population and a modern and growing telecommunications infrastructure, the MENA region has a powerful opportunity to take a leading position concerning online business both regionally and internationally.
The region has witnessed a significant increase in Internet usage and it comes as no surprise that the Internet is quickly becoming the cornerstone for business and communication which clearly demonstrates the strong retailing and broader economic opportunities that lay ahead for the region. As more people shop online, UAE and Egypt have already experienced some great innovation and might become part of the fastest growing e-commerce markets in the world over the next few years.
The most important trends for e-commerce for 2018 are Customer-focused trends, Technology-focused trends and Engagement-focused trends.Looking at the e-commerce or online shopping sector, the way to rise to the top in e-commerce is by targeting customer convenience, showing them how to save money and definitely being better than your competitors! Building a good reputation is paramount as this generation; people do things because of recommendations and suggestions by people they know and trust. Hence, the importance of ambassadors and social media in e-commerce business.
E-commerce & online shopping sector models
The Middle East is the fastest growing hub for online businesses led by Egypt. From Careem, Trivago, Uber, to Air-bnb, SWVL, Vezeeta & Yaoota.
“Everything is now just a click away to ease your life and be next to your doorstep”.
Careem is the first regional leading ride-hailing App in MENA, starting operations late 2014. Uber introduced the idea of a transportation app to Egypt at the time. They both truly changed the way people think about transportation. As surprising as it sounds, Egypt is now one of Uber’s most important markets.
According to a report by We Are Social, a research group & Payfort report1
Egypt is the 12th in the world in investing in e-commerce or online shopping sector, and by 2020 its e-commerce market will have almost doubled its 2014 figure to reach $2.7 billion. Young people are heavy users of the Web in the MENA region and over 50% of Egypt’s population now has access to the Internet, ranking the country 14th in Internet use globally.
When it comes to Egyptian online shoppers, 50% are aged between 26 and 35. The percentage of Internet users who have shopped online has increased from 1.4% to 8.7% since the 2011 Revolution. The reports found that Internet usage in the region grew by 1,500% in a decade, from 1.2 million users in 2000 to 18.7 million in 2010 then to 47.8 Million users in 2018.
Other examples of online businesses in Egypt that are adding value to both, those who seek convenience and/or savings are:
E-Commerce in Egypt rose fast ahead of payment solutions and hence the very high cash on delivery percentage out of total orders (above 80%). Electronic products were the most-purchased item among online purchases in Egypt at 17%, followed by airline tickets at 16%, and fashion items at 8% with Groceries growing the fastest in the last 12 months.
Today, developing an online store requires a regular analysis of the constantly changing market. Here are some of the main challenges:
The amount of e-commerce platforms and online stores are growing annually. But do we really know how the leading retailers become
In Egypt slow Internet connections contribute to the challenges facing e-commerce penetration rate. The country came last on a list of 31 countries for having the slowest Internet speed after India.
Cash on delivery is the preferred method of payment among online shoppers. 80% of online consumers prefer this to credit or debit cards. However, the rate of credit card issuance is growing annually by around 40 percent, which indicates that cash dependency may decrease.
Strategic monitoring is a real challenge, especially for an e-commerce business that is trying to go regional. Each local market has its particularities, and online retailers need to know them to develop a clear strategy to reach their target audience.
leaders. Adapting your strategy to local markets is a key step in regional positioning and asking yourself important questions such as: “What efforts need to be made to execute an effective online strategy?” “What needs to come first?” “How can everything be sorted out in an orderly way?
Shipping & agility will be the key
In this competitive environment, e-commerce companies have to be innovative in optimizing their last mile deliveries. E-commerce companies that can move goods quickly the moment the customer places an order and yet charge zero or negligible shipping fees are going to win by a bigger margin. Online Shopping companies will need to fine-tune their logistic partnership & shipping integrations, as well as do packaging quality-checks to ensure the customer receives the right product with the right packaging at the right time.
Innovation is what makes you stand out from the crowd, and agility. It’s important to have your finger on the pulse and be in line with the changing trends prevailing in the e-commerce & online business industries. Those in charge of developing e-commerce marketing strategies for the next couple of years should pay close attention to major trends and formulate an effective strategy to stay ahead of their competitors and attract as many potential customers as possible.
“Winning the trust of Egyptian buyers may take some time, but your efforts may result in customers that will be keen shoppers, loyal to your brand for a long time”
The new wave of online winners (next generation) will be aggregators like Trivago, Air BnB and possibly Yaoota and Mowafer if they add e-commerce to the price comparison. Mowafer, as an example, is now offering to get you the cheapest prices set by retailers right at your doorsteps in both electronics and groceries. The future will belong to those who plant a seed today-if it is not too late already-to the aggregators simplifying and optimizing consumers’ lives.
They might even change industry norms that have become obsolete. These aggregators are building a new playing field, which will have a different set of rules yet to be shaped. It is either you get to be one of its designers today or face the risk of missing the boat and thinking about what could have been for the remaining of your life cycle.
"We are at the age of if you are not online, then you will be offline and possibly out of business." - Basil Khattab
Basil Khattab, Chairman & CEO of Mowafer.com (e-Commerce) & Chairman of e-Log & etail Care (Online Logistics/Courier), spent over 15 years in the FMCG industry in leadership roles before launching his own online businesses. He believes in riding the business wave and is an entrepreneur at heart.