E-commerce activity has witnessed a noticed boom with consumer trends changing since the onset of the COVID-19 crisis.
General manager of Souq.com, Amazon’s leading e-commerce platform in the region, Omar Elsahy, shares with Ahram Online his thoughts and insights regarding the Covid-19 pandemic's impact on doing business in Egypt, and how the crisis helps put focus on the importance of e-commerce.
Ahram Online: How do you see the Covid-19 pandemic's impact on economic activity in the Egyptian market?
Omer Elsahy: At Souq.com, we continuously focus on expanding our product portfolio to be able to deliver to our customers a wide range of products at the best value, with a great user experience. Growth happens year-on-year regardless of Covid-19. And building consumer trust is also an important aspect, especially now that there has been a shift in consumer thinking as more people are recognising the benefits of a larger selection of products and great prices online, all from the comfort and safety of their homes.
In parallel, more and more businesses have been establishing an online presence and integrating e-commerce into their operations, to be able to get their products and services to customers safely and efficiently. And we see our existing seller partners expanding online operations as they choose to grow their businesses with us.
We believe that the e-commerce sector will continue to grow, as MENA economies continue to diversify economically, as logistics improve, and as the number of mobile users grows, broadening the addressable market segment.
AO: How has the ongoing crisis affected e-commerce activity in the global and domestic market?
OS: The retail sector is constantly evolving to meet customers’ needs and we are proud to see how the sector has grown and evolved to where it is today. A recent study published by the Institute of National Planning (INP) highlights that only an estimated eight percent of Egypt's total number of Internet users made online purchases (about 4.8 million users), prior to the Covid-19. There has been a major shift in Egyptian consumer trends following the outbreak, with the volume of e-commerce expected to increase by at least 50 percent in the coming period.
Strategic consultant and market trends analyst Islam El-Saadany also emphasised that the e-commerce sector is currently one of the fastest growing sectors, expecting growth of 300 to 500 percent over the coming period. All the current data supports the idea that the online retail sector is thriving in Egypt, due to recent changes in consumer behaviour.
AO: Could you tell us the impact of the crisis on your business in Egypt?
OS: The last few months have witnessed a rising number of new Souq.com customers and more frequent orders from existing customers, while more businesses have been integrating and joining us in the online shopping world.
During the first few weeks of the crisis, one of the most noticed changes we observed was a strong increase in demand for everyday products, especially groceries, hygiene products, and work from home supplies as people were staying home. We have also seen an increase in purchases in lifestyle categories, including kitchenware, entertainment and sports equipment, reflecting the change in consumer behaviour.
Throughout this whole period, our focus has been on serving customers who need necessary products, while ensuring that our workforce remains safe, and supporting our communities.
AO: Can the ongoing crisis and its related repercussions be considered as positive to your business, in general and in the Egyptian market in particular?
OS: The ongoing crisis has imposed several challenges on all businesses. All entities have been trying to adapt to the current situation. However, with regards to the e-commerce market segment, we have noticed that many businesses have fast-tracked their online presence to reach their customers in a more efficient, effective and safe manner. We are also continuously providing support to local businesses to help them move into the e-commerce space, giving them access to millions of customers. Additionally, as aforementioned, more people have been enjoying the benefits of online shopping as they realise the added value of the service that we are providing.
AO: Do you think the boom e-commerce has witnessed amid the Covid-19 crisis will be continued if the crisis ends?
OS: The outbreak of Covid-19 has had many implications that will continue to shape and impact different aspects of our daily lives, including how people have been relying more on online shopping as it allows them to get their daily needs while staying safe at home.
As a large technology company, we are committed to leveraging our scale for good, and are using our ability to innovate quickly to support communities worldwide. We worked hard to deploy all best practices from our global operations here in the MENA region, and our aim is to continue serving our customers while prioritising their safety.
AO: Has Souq.com introduced new services or facilities since the onset of the crisis?
OS: Souq has been adjusting to the current circumstances that all of us are facing during this unprecedented time. It is our role to ensure that customers continue to find the items they need when they need them. We are committed to continuing to do so in a safe and responsible manner. We follow strict health and safety guidance outlined by the World Health Organisation (WHO) and Egypt's Ministry of Health and Population as we work to fulfill our customers’ orders.
Such safety practices include deliveries that can be left unattended, requiring delivery associates to maintain a safe two-metre distance, and removing requirements for customers’ signatures. Additionally, the method by which consumers are paying for goods is evolving as many are moving away from cash-on-delivery (COD), a traditionally long-established payment method, and moving towards a wide range of online payment means which we are incentivising.
While we continue to offer COD as a payment option for Souq.com customers, we are increasingly encouraging customers to use online payment methods for contactless deliveries using debit and credit cards (Visa and Mastercard), or gift cards.
AO: Does Souq.com plan to introduce new services? What are your future plans in Egypt?
Unfortunately, we cannot comment on future plans. However, Egypt is an important market for Souq.com and we will continue to invest across the country, innovating for customers to provide them with fast delivery, more selection and great value.
Egypt is a big and important market for Amazon in the MENA region. Since Amazon’s acquisition of Souq.com in 2017, we have been focused on integrating Souq and Amazon offerings to provide customers in Egypt with great service, a trusted online shopping experience and a growing array of products and services at low prices with fast delivery.
Every month, Souq.com attracts over 4.5 million customers keen to discover our catalogue, which includes more than 9.5 million unique products across 35 different categories, from electronics, apparel and accessories, furniture, home and kitchen goods, beauty and personal care, groceries and more.
We currently have one Fulfillment Centre along with over 10 Delivery Stations supported by a workforce of over 1,000 across Egypt. We have and will continue to invest and grow our operations locally, innovating on behalf of our customers to continue delivering a great online shopping experience.
AO: Do you think that Egypt needs to adopt new policies and procedures in order to support e-commerce activity and to boost the business climate in general?
OS:The retail sector, including e-commerce, is constantly evolving to meet customers’ needs and we are proud to see how the sector has continuously been growing and evolving. I am very happy to see the advancements that have been made so far, and look forward to seeing this sector continue to grow.
With regards to the kind of support that this sector needs to thrive, I am in agreement with the suggestions in the study published by the INP, which highlight the need for a national strategy for e-commerce, coupled with the adoption of laws to regulate e-commerce, and the integration of the formal and informal markets.