The rise of e-commerce in Egypt: Igniting economic growth through SMBs

Wednesday 31 Jan 2024

I have been privileged throughout my career to meet many entrepreneurs; and their boundless energy and passion to innovate never fails to amaze me.

Omar Elsahy, General Manager, Amazon Egypt
Omar Elsahy, General Manager, Amazon Egypt

 

One example is a local business owner called Mariam who spotted a gap in the market segment and started a range of cookware that is today sold internationally through Amazon.

An architect with a passion for food, she often wanted to bring home the cast-iron pots and pans she saw on her travels abroad.

Then one day she thought, perhaps I can help other people in Egypt access these products by creating the first Egyptian brand in the space. She did just that – and today she is selling to customers across the country and in other parts of the world.

Whether through my own experience as an entrepreneur, during the time I spent as a judge on the TV series The Chance, or in my job today, I have had the honour to meet many bright minds like Mariam.

They are a constant source of energy and have helped spark many inspirations that I have taken back to help me do my job better. Today, these digitally enabled entrepreneurs and small business owners are much more than just a creative force – they have an important role in serving our communities and driving a positive impact on the economy of Egypt.

Entrepreneurs and e-commerce
 

Against a backdrop of global challenges and current GDP growth rate challenges, e-commerce will be a vital driver of economic success for Egypt. Indeed, it has been named as one of five megatrends that will shape the future of the MENA region as its economies look to diversify.

The e-commerce market segment in Egypt is predicted to witness exponential growth between now and the end of the decade, from around $9 billion today to over $18 billion by 2029. Currently, it only represents around 5% of general trade underscoring its growth potential.

Growing e-commerce is also a vital element of creating the Digital Egypt that will help the country deliver the sustainable, inclusive growth set out in the Ministry of Finance’s Egypt Vision 2030.

This includes encouraging innovation, increasing employment opportunities, investing in human capital and achieving financial inclusion. A key aspect of doing this will be empowering micro, small and medium enterprises (MSMEs) to access e-commerce and digitization.

Enabling MSME
 

Relatively few of these businesses are online . Making up 98% of private enterprises in the country, MSMEs are the “backbone of Egypt’s economy” as called out by the United Nations. Micro-enterprises account for about 95% of MSMEs, and a majority of these are informal businesses  – firms that have value but are not formally registered. 

Integrating these businesses – including makers of traditional and artisan Egyptian products such as handicrafts, furniture and textiles  – into the formal economy will accelerate their financial inclusion and help them access support. It is a priority for the Egyptian Micro, Small, and Medium Enterprises Development Agency (MSMEDA) and will be vital for achieving Egypt’s Vision 2030, not just due to the economic impact, but also through creating jobs within their communities and generating sustainable incomes. 

E-commerce will be a vital enabler for MSMEs, helping them access tools and support to grow their business and connecting them with customers across local market segments and further afield, including GCC and European countries. 

Sharing knowledge of the benefits of e-commerce across the country will be critical to driving adoption. Amazon holds regular Sellers’ Summits to do this – presenting the benefits to sellers and helping them grow their services. It is important to treat each company as a partner – listening to their problems and collaborating with them to fulfil their vision.

Technology and talent
 

Another crucial aspect of growing the sector will be equipping people in Egypt with access to state-of-the-art tools and world-class e-commerce-related skills. For sellers and manufacturers, this means being able to access global technologies and fulfilment capabilities will extend their reach. Alongside, they will need support and tools to help them present and scale their businesses.

Creating upskill opportunities for work in e-commerce is also essential – and there is vast potential here to build the tech-literate workforce needed to deliver the Digital Egypt vision. And there is a great base to build on – with many young and social-media-savvy people entering the workforce. E-commerce will expose them to skills in AI, machine learning, cloud computing and more. 

At Amazon, we are creating over 40 different types of roles for people with diverse backgrounds, education and skills. This includes roles in fulfilment centres, customer services, marketing, analytics and supply chain technology.

All of this will create a better experience for customers, as the workforce solves challenges, including integrating local languages and nuances into systems and adapting payment methods to accommodate non-banking customers.

Maturing the landscape

 

Egypt is still at the beginning of this journey, but progress is promising. For example, in 2023, Amazon Egypt supported local enterprises selling over 10 million handicraft products and growing their business over 40% year-on-year.

Companies like Amazon have a vital role to play in helping create the environment for e-commerce to grow – through technological innovation and local experience. Also through close collaboration with government agencies charged with delivering Egypt's 2030 Vision, including MSMEDA

This consistent focus on encouraging MSMEs to embrace e-commerce will have wide-ranging impacts, helping upskill the workforce and opening up the world market to millions of Egyptian entrepreneurs like Mariam.

Ultimately, it will pave the way for Egypt’s vision of economic diversification and digital transformation.


Short link: