Egyptian E-commerce Sector Sees Explosive Growth
The Egyptian e-commerce sector is experiencing explosive growth, transforming the country's retail landscape and reshaping consumer behavior. The increasing internet and smartphone penetration has connected Egyptians to the digital world, while growing consumer trust in online platforms and expanding logistics infrastructure have facilitated seamless online shopping experiences.
Rise of E-commerce in Egypt
With the increase in internet access, particularly in underserved rural areas, the potential customer base for e-commerce has expanded significantly. This accessibility has enabled people in remote areas to shop online, contributing to market growth. Moreover, the increased use of smartphones has driven the growth of mobile commerce (m-commerce). Businesses are focusing more on creating mobile-optimized experiences, allowing for easier navigation and higher conversion rates. The availability of mobile payment solutions and digital wallets has made transactions easier and more secure, encouraging customers to shop online with greater confidence and convenience.
Evolving Consumer Behavior
In Egypt, consumer behavior is shifting significantly towards e-commerce. It is now easier to shop online, with better options and variety compared to physical stores. Although product quality and size can be uncertain, these issues can be mitigated by reading descriptions and reviews. Today, consumers are more aware and can make informed decisions about products based on reviews. Factors influencing the decision to purchase a product online include quality and price, which reflects the actual budget. Consumer behavior has played a significant role in the growth of e-commerce, which relies on consumer trust, built on secure transactions, reliable product quality, excellent customer service, and positive social proof. This trust fosters brand loyalty and encourages online shopping adoption.
Government Support
However, this growth would not have been possible without government support. The Egyptian government is actively working to support e-commerce. The Egyptian national e-commerce strategy, launched in December 2017, aims to strengthen the country's digital economy and develop online business activities. There is also the "Regulated E-commerce" initiative, launched in December 2024, which has shown promise in shaping Egypt's digital commerce landscape. Together, they have strengthened trust in e-commerce, which is essential for encouraging its widespread adoption. These regulations give consumers the assurance that their rights are protected when making online purchases.
Future Prospects
The Egyptian e-commerce market still faces several challenges, including increasing competition between startups and international players, data privacy, and cyberfraud. Although progress has been made in improving delivery systems, Egypt's logistics infrastructure remains a significant challenge, particularly when it comes to reaching customers in remote areas. Businesses will need to invest in better delivery solutions to improve reliability and speed. Nevertheless, the e-commerce sector in Egypt has significant potential for further growth. The increasing middle class in Egypt represents a substantial opportunity for the e-commerce sector. With rising disposable income, more consumers will be able to participate in the digital economy.
Why is Tunisia Lagging Behind?
In Tunisia, there is a high penetration of smartphones, but not as much growth in e-commerce. There are three main reasons for this:
- Limited number of online stores: As of September 2024, there were only 1,210 e-commerce sites in Tunisia, which is a relatively low number to create a widespread dynamic. In reality, there are several barriers to entry, such as the high cost for small businesses to develop and maintain an up-to-date online store. Additionally, securing payments and linking them to the company's bank account is not a good deal from a tax perspective.
- Lack of "BuyNow, PayLater" technology: The "BuyNow, PayLater" technology, which allows customers to buy an item and pay in installments, was not available in Tunisia until recently. If the regulation governing checks had not been implemented, this would not have been possible. This technology will open the door to the development of online commerce, as it is now possible to buy items worth hundreds of dinars and pay later. However, if the financing scheme involves a small bank loan and interest, there are risks to the success of this operation.
- Lack of consumer trust: As the seller does not want to expose themselves to tax, the buyer seeks the same thing. This is why cash remains king in Tunisia. The major problem is that there is no clear solution to this fundamental issue. It is enough to look at the structure of the state's revenue and its projections to understand that the tax squeeze is only getting tighter, suffocating the economy and e-commerce with it.
