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E-commerce transactions in Egypt have reached EGP 80 billion ($5 billion) in 2021, as transactions for the sector in the Middle East reached $71 billion.
According to Sherif Makhlouf, CEO of consulting firm BOOST, electronics revenues made up the largest proportion of Egypt’s e-commerce transactions (28 percent), followed by fashion (21 percent), personal care (19 percent), toys, hobbies and DIY goods (19 percent) and furniture and appliances (12 percent).
However, direct-to-consumer (D2C) companies such as Amazon, Jumia and Noon only account for 50 percent of the e-commerce sector, said Makhlouf.
Other players, such as entrepreneurs, use other methods, such as selling goods on Facebook outside of the tax system in order to test the market.
Retailers should revise their digital strategies to compete with the major e-commerce brands, potentially building their own new D2C brands themselves, bypassing the middle-man to reach consumers directly, Makhlouf added.
Makhlouf predicted the fashion industry would be the most in-demand sector through D2C because of the relatively advanced supply chain of the industry and new product development in Egypt, followed by home accessories, personal care, toys, hobby & DIY, pet products, furniture, and appliances.
The growth of D2C brands will attract more foreign direct investments in Egypt, as already witnessed in Amazon’s acquisition of Souq Egypt, and German group Rocket Internet’s investment in Egypt through Jumia, he said.
(Writing by Imogen Lillywhite; editing by Seban Scaria)
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