As we wrap up 2018, I want to take this opportunity to wish you a very Merry Christmas and the best of health and fortune for the upcoming year.
2018 has been a healthy year for E-Commerce progress in Egypt. We have seen more local start ups catering for niche customers or products launch in Egypt this past year. Furthermore, there seemed to be a frenzy of retail brands, both big and medium, as well as, local and international, running to jump on the fast moving digital retail train within 2018. However, the big and medium retailers are still struggling to set up and deploy fast enough due to shortage in technology providers and lack of sufficient local know how of e-commerce business knowledge and expertise. The size of these retailers in terms of selection and SKU’s, and the delayed corporate acceptance of E-Commerce management pillars, which differ than tradition retail, is making their shift to omni-channel much slower. Younger, lighter, and more nimble niche marketplaces and pure online brand start ups are much better and faster in their deployment efforts.
The market remains heavily dominated by the two big giants in Egypt, Souq.com and Jumia.com . Both have been focusing on increasing selection of offerings, aggressive new customer acquisition, and further enhancements to the overall customer experience process.
Starting in 2019, these two companies will encounter another potential big player in the local market, the well financed and regional e-commerce brand Noon.com. Noon.com initially had plans to be live within the November e-commerce and retail shopping season, but I think that they correctly realised it would be better to avoid a launch in a such new and big market during that time. Noon.com is expected to launch in Egypt in early 2019. They will make sure to make their mark on the Egyptian consumer in 2019. It will be interesting to see how the e-commerce scene will evolve, and what will be their impact on both the consumer and the other players, before Q4 2019.
Egyptian E-Commerce Market Trends To Watch Out For in 2019:
The below are my personal thoughts and predictions for some trends in the local Egyptian e-commerce market. The trends presented are based on my discussions with many business owners, industry experts, and most importantly monitoring the development of other more mature markets around the world (China + South East Asia specifically, then Europe and the US). I also am obviously monitoring closer the challenges and needs for the last mile delivery / logistics aspects of the industry due to it being my professional focus.
The year 2019 will be the year of inflection-point growth for E-Commerce in Egypt. Both for domestic and cross-border (inbound and outbound).
- Growth rate in the number of shipments for the Big two will be no less than 150%-200% that of 2018. There are a few clear “why’s” to which I attribute this, but mostly common will be the overall maturity of the market and the acceptance of more consumers acquired during 2018 and continuing in to 2019. The continued increase of cost of living in Egypt will also drive more and more consumers to explore alternative methods to sourcing their basic and niche needs from new channels other than what they are traditionally used to.
- We will see more and more retailers take the step to have their own direct B2C digital footprint. More retailers will launch their online channel directly. Whether they maintain their presence on other marketplaces or not, may differ from one company to another.
- We look forward to more foreign sellers and brands wanting to cater to the Egyptian consumers via e-commerce even if they are not physically in Egypt. Therefore, the demand for end-to-end cross border solution providers “TO” Egypt and “IN” Egypt will be much higher this year.
- On the same token look out for outbound e-commerce shipments from Egypt to neighbouring and regional markets to increase significantly. More and more Egyptian start ups and brands will use e-commerce to reach individual and distributor customers outside of Egypt.
- We expect further growth, development, and innovations in the delivery of large size / bulky items, such as White Goods (Home Appliances) and Furniture, etc. This is one of the healthiest growing verticals for E-Commerce in Egypt, yet one of the most poorly served.
- We expect merchants to be more demanding of delivery companies, as their customers will be more educated and also demanding for a better and more convenient online delivery experience.
- We expect fuel prices to go up again, which will be a cost pressure point for the whole e-commerce ecosystem. However, it will drive more people to shop online instead of using their own vehicles or public transportation which costs will directly increase also Furthermore, the online item selection and price comparison offerings will become more and more applicable and relevant in such economic conditions.
- We expect the e-commerce penetration and conversion in Tier 2 and Tier 3 regions (Delta, Canal, and Upper Egypt) to experience unprecedented growth further next year. Furthermore, their consumer will be more demanding on delivery time and experience similar to Tier 1 (Greater Cairo) customers.
These are some of my thoughts to 2019. If you have any comments on what I wrote or wish to share other potential trends, please feel free to share with myself and the network here. It is always very healthy to read and discuss different perspectives.
I wish you all a wonderful holiday season. May you get the well deserved rest and break after this past busy season.
See you all in 2019, the year of #ECommerceIsNow for Egyptian E-Commerce.
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