the e-commerce market in Egypt

1. E-commerce Market
An Overview of the E-commerce Sector in Egypt

2. Agenda
š The E-commerce sector in Egypt
š Major trends.
š Players.
š Challenges.
Dr. Magdy Abdelsattar 2

3. Major Trends
š E-commerce startups still face some major hurdles to growth,
including :
š lack of banking options,
š a general mistrust of online purchasing,
š outdated or nonexistent government regulation.
š In general, Egypt is a tough market, due to :
š high computer illiteracy,
š a poor telecoms infrastructure,
š weakened economic conditions .
š nearly a fifth of the population lives below the national poverty line, all of this
is only compounded by political uncertainty since the revolution in 2011.
š It's particularly tough to handle online payments; cash on delivery
is a must for any successful e-commerce site in the country.Dr. Magdy Abdelsattar 3

4. Major Trends
š In 2010 only 10% of the population had bank accounts, 45% of the
population, which is below 18, is ineligible for bank-issued cards, and in
2010 only 4% of Egyptians had debit cards and less than 2% had credit
cards.
š The government’s lack of regulation or certainty around online
payment legislation is a big obstacle to protecting online transactions
as well.
š Not much has been done since e-signature
infrastructure was legislated in 2004to make e-commerce payments
more secure.
š Many banks in Egypt won’t allow users to purchase products online
with the credit cards they do have, due to a fear that consumers will
ask for paybacks or refunds en masse, yet there are a few who do,
with limitations.
š Regional payment gateways are also on the rise in Egypt, and U.S.
company PayPal plans to enter the Egyptian market this year.
Dr. Magdy Abdelsattar 4

5. Major Trends
š Despite all of this, Egypt remains an incredibly appealing market for
new e-commerce companies due to the low cost of doing business
and the fact that Egyptians simply love to buy things online. Here's
why:
š 22.4% use e-commerce to either buy a product or to pay bills online.
š Data also shows that electronics are the most popular products purchased
online in Egypt, followed by software, airline tickets and website subscriptions.
š The overall penetration rate of e-commerce in the Egyptian
population is still low at 3.4% but Egypt’s online purchases are
expected to more than triple by 2016, with Egyptians spending as
much as $447.3 million on e-commerce.
š Rising internet penetration- up to 44% in 2012 from 12.6% in 2006.
Dr. Magdy Abdelsattar 5

6. Major Trends
š As will growing mobile penetration, which is up to a staggering
115%in 2012, from 24% in 2006.
š Smartphone penetration likewise has grown to 26% in 2012.
š Egyptians also enjoy shopping on their phones; an
estimated 82% of Smartphone users have researched a
product or service on their phone.
š 41% have used their Smartphone to make a purchase.
š M-commerce will clearly be a large part of any e-commerce
company's strategy in Egypt over the next decade.
Dr. Magdy Abdelsattar 6

7. Players
š To take a snapshot of the current ecosystem, here's a look at the
major e-commerce players in Egypt.
š Daily Deals
š AgmadDEAL
š Cobone - In Cairo, Dubai-based Cobone only offers travels deals for Beirut,
Abu Dhabi, Cairo and Jeddah.
š Dare n’ Deal – A leader in the Egyptian market.
š Dealazion – A mobile daily deals aggregator from Egypt.
š GoSawa - A Lebanese platform that has expanded to the Emirates, Egypt,
Qatar and Saudi Arabia.
š Groupon – U.S. company, with UAE headquarters, expanding across the
region.
š Hala Deals
š Offerna - A leader in the Egyptian market.
š OfferatakDr. Magdy Abdelsattar 7

8. Players
š Online Retail:
The below sites offer products across many categories.
š Jumia
š Nefsak
š Souq.com Egypt
š Books:
š Alef Bookstores – Offers books for Egyptian consumers.
š Books.com.eg – Offers Arabic books for sale in a “Social Store”.
š The Book Spot – Offers books for Egyptian consumers.
š Cairo Books – Offers books for Egyptian consumers.
š Diwan Bookstores - Offers books for Egyptian consumers.
š Jamalon - Offers books for regional consumers.
Dr. Magdy Abdelsattar 8

9. Players
š Electronics:
š Cairo Sales Stores.
š Computer Shop.
š E3050.
š El Shennawy.
š El Tamimi Stores.
š Game Valley – Online video game retailer.
š Fashion:
š OpenDayz – Aggregates products for online sale across Egypt and acts as intermediary
between retailer and consumer.
š Other:
š agzakhana.com – Cosmetics and wellness online store.
š Bkam – Price comparisons for e-commerce sites in Egypt.
š Egyrl.com – Products for women.
š Eshtery - A mobile-based virtual supermarket for Egypt.
š Hedeya – Childcare products.
š Mumzworld – Offers products for mothers and childcare.Dr. Magdy Abdelsattar 9

10. Players
š Flash Sales
The platforms below all offer time-limited deals for clothing and accessories.
š MarkaVIP - A leader in the space; based in Dubai.
š Sukar.com (Acquired by Souq.com)
š Offline Stores Going Online
š Al Ghanem – Started in 1964, now with an online presence for electronics.
š Online Classified Ads
The below companies allow users in Egypt to buy and sell products in several
categories, from electronics to clothing, and handicrafts to gifts.
š Bey3.
š Masrawy.
š Olx.
š Waseet.net.Dr. Magdy Abdelsattar 10

11. Players
š Available Payment Gateways:
All of these gateways work for paying customers in
Egypt, but each may have a specific bank
partner, which can be found on their individual
website. In Egypt, options include:
š Gateways:
š 2CheckOut.
š Authorize.net.
š PayPal (coming soon)
š Skrill
š Wallety – A payment solution designed to make credit card purchase smore
secure.Dr. Magdy Abdelsattar 11

12. Payment Gateways in the Arab
World: 2013 (Infographic)
š Payment Gateways in the Arab World: 2013 [Infographic]
by wamda, February 20, 2013:
š If you're looking to startup an e-commerce company in the Middle East,
here's our cheat sheet showing the availability and cost structure of
several major gateways.
š This update shows lower rates for PayPal in the UAE, Qatar, and Kuwait
and the addition of new gateway Faturah in Saudi Arabia.
š Check out each option to see which payment gateway may be best
for your startup. If you’ve had experience with any of these gateways,
let us know how it went in the comment section below.
Dr. Magdy Abdelsattar 12

13. Payment Gateways in the Arab
World
Dr. Magdy Abdelsattar 13

14. Players
š Prepaid Cards:
š CashI.
š Cashna.
š CashU – Offers a prepaid account.
š DixiPay.
š Gate2Play - Introduces online merchants to global payment gateways, and offers
them other relevant services.
š OneCard.
š Banks:
š Arab African International Bank – Has a partnership with Wallety for secure
payment.
š Arab Bank.
š Citibank Egypt.
š Commercial International Bank of Egypt.
š HSBC.
š National Bank of Egypt.
š National Société Générale Bank.
Dr. Magdy Abdelsattar 14

15. Players
š Frontend/Backend Solutions:
š The below offers complete e-commerce solutions which connects to available payment
gateway solutions.
š ShopGo - Focuses exclusively on building complete ecommerce solutions.
š The below are some companies in Egypt that offer design and web development solutions.
š ClickNet.
š Digital ITS.
š eGo Solutions.
š Egygo.net.
š Egypt Web Solutions.
š ElMotehada Web.
š Graphicano.
š MRCO-Egypt.
š Pack2Net.
š STS.Dr. Magdy Abdelsattar 15

16. Challenges.
š You can tell from the lists above that the e-commerce
ecosystem in Egypt still has a lot of room for growth, but the
companies that have been successful so far can be a strong
model for the next generation of e-commerce entrepreneurs.
As long as innovators are able to overcome (or solve) the
steep hurdles to e-commerce growth in the market, Egypt has
the potential to be one of the largest customer bases in the
region.
Dr. Magdy Abdelsattar 16