Egypt’s e-commerce transactions total EGP 80 billion in 2021: EJB

E-commerce transactions in Egypt hit EGP 80 billion in 2021, while the Middle East recorded $ 71 billion in 2021, according to Egyptian Junior Businessmen Association (EJB) member and CEO of BOOST Sherif Makhlouf.

Makhlouf told Daily News Egypt that electronics leads e-commerce revenues in Egypt with a percentage of 28%, followed by fashion (21%), food and personal care (19%), toys, hobbies and home improvement (19%) . and furniture and appliances (12%).

With regard to direct-to-consumer (D2C) businesses, Makhlouf clarified that D2C companies are retailers who sell directly to consumers, usually by investing in new product development and branding while outsourcing their supply chains, and underlines that that they usually sell through digital channels or direct sales while leaving out retail overheads and benefiting greatly from social media marketing.

Makhlouf pointed out that the D2C trend is only part of the ecommerce world, pointing out that marketplaces like Amazon, Jumia and Noon only make up 50% of the ecommerce sector.

He expected the proliferation of D2C to have a positive impact on the Egyptian economy, as many e-commerce brands shop and manufacture locally, and many of them ship products internationally.

The EJB member believes that the e-commerce market in Egypt needs no regulation other than current retail and consumer protection laws and stresses the importance of providing support and incentives to allow it to thrive.

Makhlouf predicted that due to the industry’s relatively advanced supply chain and new product development in Egypt, the fashion industry would be the most requested sector by the D2C, followed by home accessories, personal care, toys, hobby & home improvement, pet products, furniture, and appliances.

He also predicted that the electronics and media industries would not make any progress on the D2C model due to the complexity of the production and supply chain.

The EJB member said the growth of D2C brands will attract more foreign direct investment into Egypt, referring to Amazon’s takeover of Souq Egypt and Jumia’s investment of German concern Rocket Internet in Egypt.

He noted that the D2C trend is affecting traditional retailers, but he encouraged many retailers to revise their digital strategies to compete with such brands, perhaps even creating new D2C brands themselves, direct channels that skip the intermediary.

He added that selling items on Facebook outside of the tax system is the form many of these sellers are testing the market and realizing demand for their products with the sophistication of the new Egyptian e-commerce purchase and in the post-Covid – Recognize Era Many sellers now have legitimate online businesses and with large operations and mostly tax paying like any other retailer out there.

Makhlouf said the coronavirus had accelerated the adoption of e-commerce by Egyptian consumers, but that matter would happen anyway, adding it was only a matter of time.

“She [consumers] discover products and solutions online, buy them and get efficiently delivered and that is becoming a reality just like anywhere else in the world, ”he concluded.

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