Yet e-commerce currently generates only 0.3% of Egypt’s retail sales—much less than in other countries in the Middle East¸ according to the Boston Consulting Group. The cultural proclivity for delivery seems to be overwhelmed by practical problems: internet speeds are slow, few people have bank accounts let alone credit cards and digital literacy is low. Still, online revenues are expected to grow—even with the country in political turmoil.
One reason is better infrastructure and more experience: internet penetration has more than doubled to nearly 40% in the 90m-strong country since 2011. The share of internet users who have shopped online has risen from 1.4% to 8.7%. But Facebook, which helped bring about Egypt’s revolution three years ago, may be a more powerful factor: with about 15m "friends", the social network now has three times as many users in the country as it did before the Arab spring.
Egyptians are also among the world’s most highly engaged Facebookers: they “like” more, share more and click more on advertising than many fellow netizens. This makes ads on the social network very cost-effective. “Amid Egypt’s dire economic situation every dollar counts,” says Sara Metwally, boss of StarcomMediaVest, part of Publicis, a French advertising group.
“Word-of-mouth marketing is especially important here,” says Sherif Barakat, head of Samsung’s division for hand-held products in Egypt. According to a 2010 study by McKinsey, a consultancy, recommendations from friends are the most important factor in purchase decisions in developing countries.
Samsung’s Facebook page is the most popular in Egypt, boasting 4.7m “likes”. “Facebook users are the opinion leaders when it comes to technology,” says Mr Barakat. The Korean electronics maker expects online sales in Egypt, which today account for 5% of its total revenues in the country, to grow to 20% by the end of 2015, boosted in large part by the firm’s Facebook page, which links to affiliated online retailers.
One such partner is Jumia (pictured), which sells a range of electronics, fashion items and sports equipment. Founded by Rocket Internet, the German internet conglomerate, Jumia has nabbed 35% of Egypt’s online retail market over the past year. Some 40% of traffic to the site arrives via Facebook, compared with only 25% via paid advertising.
Ironically, further political turmoil in Egypt could be a boon for e-commerce. Lack of security and night-time curfews following the ousting of President Muhammad Morsi last summer has already provided a boost, says Omar al-Sahi, the country head of Souq.com, the region’s biggest online retailer. Sales spiked after the curfew was introduced in August, he reports. But even when it was lifted in November, many stuck with online shopping. “If you provide Egyptians with good service they will never leave you,” explains Mattia Perroni, chief executive of Jumia in Egypt.EGYPT should be fertile ground for e-commerce. Hellish traffic in its cities and an undeveloped retail sector in many parts of the country make online shopping an attractive option. And Egyptians have long been accustomed to having things delivered, particularly food. In medieval times fires used to heat the public baths also served to cook foul, a traditional dish of brown beans, which was then dispatched to locals. Today many convenience stores, pharmacists, tailors and even hairdressers are in the delivery business.