Last week, Egypt became the first African country and the third in the Middle East to see Amazon, the world’s biggest online retailer, operating in its local online retail sector.
Amazon.eg replaced Egypt’s top online retailer Souq.eg four years after the latter was acquired by the giant US e-commerce company for $580 million.
“Today marks a proud day for Souq.com and Amazon, as we have been working towards it since the two companies came together [in 2017]. Amazon.eg brings together Souq.com’s local know-how and Amazon’s global expertise, something we believe will be of significant value to customers across Egypt,” said Omar Elsahy, general manager of Souq.eg and now Amazon Egypt country manager.
The news of Amazon operating in Egypt was received with optimism from Egyptian consumers until their first shopping experience through Amazon.eg.
“At first, I was happy and thought that foreign products would be available after they were not on Souq. But I found that all they did was take the same products from Souq at the same prices and put the Amazon logo on them,” Marwa Shahin, 37, told Al-Ahram Weekly.
A day before the official re-launch, Amazon announced that with investments worth over LE1 billion, it had established corporate and customer-service offices and a total local workforce of over 3,000 people across corporate, customer service, and operations in Egypt.
This was mentioned in the presence of Prime Minister Mustafa Madbouli and Trade Minister Nevine Gamea when Amazon’s 28,000-square-metre logistics warehouse located in 10 Ramadan city in the Sharqiya governorate was inaugurated.
Adding to the optimism among consumers was the belief that the warehouse would store imported products in a way that could lower customs and shipping fees paid when ordering items from abroad.
“All the available items for order are products in the local market,” Elsahy said in a phone-in with media presenter Lamis Al-Hadidi on ON E TV channel.
During the inauguration of the warehouse, Ronaldo Mashhour, vice president of Amazon for the Middle East and North Africa, said that Amazon aimed to provide a faster shopping and delivery service to meet the demands of online shopping customers in Egypt.
“Our focus now is to provide more products at more competitive prices and faster delivery,” he said.
Compared with Souq, the change with Amazon is largely dependent on innovation to lead to faster shipping and the availability of more products, Elsahy said. Amazon has acquired the database of Souq’s consumers to provide them with the wide range of services it offers in other markets.
Elsahy said that Souq’s consumer account details, login information, delivery addresses, payment methods, and wish lists had seamlessly transitioned to their new Amazon accounts. Any balance in a Souq wallet would be moved to Amazon and any orders previously placed on Souq would be delivered.
“We had hoped that Amazon would import products we struggle to buy from abroad whether through Amazon or eBay due to the high customs and fees added,” Ahmed Saad said.
“I once ordered a pair of shoes from the UK that was priced at LE1,600, including shipping. I paid online, and when the day of delivery came I found that I had to pay an extra LE2,400 for customs and fees. This is a major problem consumers in Egypt undergo when ordering online from abroad. We thought that when we had Amazon in Egypt such struggles would become a thing of the past,” he said.
“Souq was already fast in delivery and had competitive prices compared to other local retailers. The only difference now is that it is Amazon not Souq that is online — in other words, it is a rebrand only,” Samir Mohamed, a consumer who used to buy from Souq, said.
The Covid-19 pandemic drove a surge in the growth of online retail sales in Egypt during 2020-21, according to EuroMonitor International, a provider of market research.
“Although a shift in online payment for both public and private-sector commodities and services was anticipated, nobody expected it to happen so quickly in a country where the illiteracy rate is close to 30 per cent,” Samia Khedr, a professor of sociology at Ain Shams University in Cairo, told the Weekly.
“It happened as a result of the pandemic.”
Online retail sales jumped by three percentage points and grew by 22 per cent throughout 2020 in seven countries, including China, the US, South Korea, and Singapore, that account for more than half of global business-to-customer (B2C) e-commerce worldwide, EuroMonitor said.
E-commerce companies like eBay, Amazon, and Walmart achieved 17, 38, and 72 per cent increases, respectively, in gross merchandise value (GMV) in 2020, compared to 2019, it said.
*A version of this article appears in print in the 9 September, 2021 edition of Al-Ahram Weekly.