The Egyptian e-commerce market is one of the most promising in the MENA region. The country has a population of over 100 million people, with a young demographic and a high level of internet and mobile penetration. In addition, Egypt’s economy is growing rapidly, with GDP growth forecast to reach 5.6% in 2020. This makes it an attractive market for foreign e-commerce businesses looking to expand into new markets.
In this article, we’ll take a look at some of the latest statistics and trends relating to e-commerce in Egypt. We’ll also provide some insights into the opportunities and challenges that businesses face when operating in this market.
E-Commerce Market Size and Growth
The size of the Egyptian e-commerce market was estimated to be worth $1.9 billion in 2019, and it is expected to grow to $3.4 billion by 2022. This represents a compound annual growth rate (CAGR) of 16%. The majority of e-commerce sales in Egypt are currently generated by the travel sector (41%), followed by fashion (17%), electronics (14%), and food & beverage (13%).
It’s worth noting that the Egyptian government is taking steps to encourage further growth of the e-commerce sector. In 2019, they introduced a new law that requires all businesses with an annual turnover of more than EGP 1 million ($64,000) to register for VAT. This move is expected to increase the number of businesses registered for VAT from 3% to 30%, which will provide a boost to the formal economy and make it easier for businesses to comply with tax regulations.
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E-Commerce Payment Methods
Cash on delivery (COD) is currently the most popular payment method for online purchases in Egypt, used by 70% of shoppers. This is followed by credit cards (19%), bank transfers (6%), and mobile payments (5%).
There are several reasons why COD is so popular in Egypt. Firstly, many Egyptian consumers do not have access to credit cards or bank accounts. Secondly, there is a high level of mistrust towards online payments, due largely to concerns about fraud and data security.
Despite the popularity of COD, there are signs that other payment methods are beginning to gain traction. In particular, mobile payments are on the rise, thanks to initiatives such as Vodafone Cash and Orange Money. These services allow customers to make secure online payments using their mobile phones.
E-Commerce Delivery Logistics
The delivery of online orders is often cited as one of the biggest challenges facing e-commerce businesses in Egypt. This is due to the country’s poor infrastructure and lack of reliable delivery services. As a result, many businesses choose to partner with established logistics companies such as Aramex and DHL.
These companies have extensive experience in delivering orders across Egypt, and they offer customers tracking information so that they can track the progress of their order from start to finish.
Another option for businesses is to use “click & collect” services, where customers can pick up their orders from designated locations such as petrol stations or convenience stores. This option is particularly popular for smaller items such as groceries or cosmetics.
Also, some businesses choose to deliver orders directly to customers’ homes using their own fleet of vehicles. This option can be expensive and logistically challenging, but it offers customers a high level of convenience and service levels.
E-commerce in Egypt is growing at a rapid pace and is expected to continue to do so in the coming years. This growth is being driven by a number of factors, including the increasing use of mobile devices, the availability of high-speed internet, and the increasing number of people who are comfortable making online purchases. Businesses that are looking to tap into this growing market should consider selling their products and services online.
Finally, e-commerce can help Egyptian businesses to save money on overhead costs, such as rent and utilities. This is because businesses do not need to maintain a physical storefront. In addition, Egyptian buyers can often get discounts on shipping costs by using an e-commerce platform.