Despite the 400% increase in internet penetration in Egypt between 2004 and 2014, just over 3,000 people are transacting online, according to a report published by Egypt’s Business Directory.
Of this number, online payments remain unpopular, with 80% remaining reliant on the cash-on-delivery service.
Egypt’s online transactions are mainly focused on electronics, airline tickets and fashion items. According to the report, approximately 75% of users are in their 30s or younger, with half of them are located in the Greater Cairo area, the report said.
The report added that the biggest challenge facing e-commerce in Egypt and the Middle East region is the low number of credit card holders.
Credit card orders increased by 36% in 2014 reaching $96 compared to $71 in 2013, while cash on delivery orders increased by 16%. Even then, only 7% of the population has bank accounts, and only 7.6 million have credit or debit cards.
The report projected that the e-commerce market in Egypt, Saudi Arabia, the UAE and Kuwait is expected to retain its strength over the next decade. This comes especially as they are the main drivers behind this growth, with 30 million online shoppers and the large number of devices connected to the internet expected to reach 50bn devices by 2020.
“The internet penetration in Egypt is growing faster than e-commerce, but still e-commerce is growing rapidly as its rates rose to 7.3% in 2014 compared to 4.6% in 2013 which is a good index for 2015,” General Manager of Souq.com Amr Al-Sahy told Daily News Egypt. Souq.com is one of the most popular online shopping portals in Egypt.
Al-Sahy said that that online shopping portals should maintain various strategies and plans to market and increase product purchases and win the customers’ trust.
Al-Sahy added that the majority of the online purchasers in Egypt rely on cash on delivery service due to e-commerce’s lack of credibility.
“At Souq.com, we have the cash on delivery service as a way for customer satisfaction. Moreover we have two other strategies free returning for products that didn’t meet customers’ expectations and customer service which is available for any inquires,” El-Sahy said.
Ahmed Alseoudy a 28-year-old IT manager, said that he is used to purchasing online because he can freely check varied items on many websites. He added that the way of presentation is good, which helps him to check all the products characteristics freely and without time restraints.
“I can purchase online, because, I find sometimes products online are not available in the offline market,” said Shaimaa Raafat , a 26-year-old social media employee.
However, Shaimaa emphasised that she purchases via cash on delivery service to be able to check the product’s quality, and that she is also afraid of credit card fraud.