According to Sherif Makhlouf, CEO of consulting firm BOOST and Egyptian Junior Businessmen Association (EJB) member, Egypt’s e-commerce transactions reached $5bn or EGP 80bn in 2021. What is really surprising is that the big names, which include Amazon, Jumia, and Noon, account for just 50 per cent of these sales. And while Amazon.eg has only been around for a few months, it was preceded by Souq, a subsidiary of Amazon.
Electronics made up the largest percent of e-commerce transactions in Egypt, estimated at 28 per cent. Fashion comes next, standing at 21 per cent of all e-commerce revenue in Egypt, followed by personal care at 19 per cent. DIY goods made up 19 per cent, while furniture and appliances revenue amounted to just 12 per cent.
It’s no secret that the COVID-19 pandemic has accelerated the growth of the e-commerce industry in Egypt. However, before 2020, online shopping was still on the rise in the North African country, but at a much slower rate compared to what the post-pandemic rate is.
Based on a study published by Mastercard, at least 72 per cent of Egyptians have been shopping more online since the start of the pandemic. That means 3 out of 4 Egyptians are open to and even prefer buying things online, all because of the pandemic.
According to Hesham Safwat, CEO of Jumia Egypt, online shopping in Egypt has witnessed an 80 per cent increase in the second quarter of 2020, when the coronavirus found its way into the country. He also added that the number of active consumers on Jumia has reached 6.8 million in the same quarter, signaling an increased demand for the platform’s products.
The global health crisis has also impacted businesses in Egypt. Thousands of store-based businesses across Egypt have shifted their operations to a hybrid model by offering their goods and services online. Lots of new brands have also emerged based on an online-only business model. The study also revealed that secure payment, delivery speed, and price are key factors for Egyptian consumers to have a satisfactory online shopping experience.
Social media platforms were found to be the best way for Egyptian consumers to discover new brands and products. 83 per cent of Egyptian shoppers find products on Facebook, while 43 per cent discover them on Instagram.
The e-commerce industry in Egypt has for a while now lacked regulation, but recently, the Egyptian Tax Authority has stated that it’s mandatory for e-commerce business owners to complete their tax filing. However, taxes will only be imposed on e-commerce businesses that exceed EGP 500,000 in revenue within a calendar year.
But since most e-commerce startups in Egypt are still growing, only a limited number of business owners will be affected by this decision. Many Egyptian entrepreneurs rely on social media networks to showcase and sell their products without necessarily launching a website. These businesses are also subject to income tax.
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