Since its invention, the internet has drastically changed the everyday life of millions around the world. Even if one is not connected to the internet, their lives still get impacted by its use and applications one way or another. This is also true in Egypt, where internet penetration has reached 50.7% of the population in 2019. But one area which Egyptians are still wary of approaching en-masse is online shopping. Until today, with exceptions, Egyptians mostly prefer to do their shopping offline and pay in cash – regardless of whether they have online access or not. Why?
To fully understand the situation, Cairo University researchers Mayada Aref and Ahmed Okasha recently published a study on the topic of online shopping in Egypt, attempting to analyze the behavior of educated, middle-class Cairenes when it comes to making orders online.
There are several factors that affect any online shopper’s final decision to make a purchase: perceived usefulness, perceived ease of use, social norm and perceived risk. In developed countries, high perceived usefulness and ease of use, encouraging social norms and low perceived risk make online shopping an easy – even desirable – decision. China, for instance, is set to see its total online retail industry jump to $650 billion this year, according to McKinsey Global Institute – more than tripling in size in merely eight years.
In Egypt, perceived risk is a considerable factor holding back the online shopping industry from actualizing its potential. In other words, Egyptians are mostly still unsure that the products they will order will be the same as they imagine – in terms of quality or specifications – or that the delivery will be on time. Additionally, the risk of sharing their bank details online still acts as a deciding factor against making an online purchase.
It is noted that recent legal enactments like the Consumer Protection Act, Cyber Crime Law and Date Protection Law, if rightly and fully implemented, could greatly contribute to less perceived risk by online shoppers in Egypt, potentially opening the door for the industry to flourish.
Perceived usefulness, ease of use and social norm
When it comes to perceived usefulness, an online shopper must simply feel that making that purchase online will save them time, resources and get them the desired outcome more efficiently. In Egypt, this is simply not the case, for the online shopping industry is still considered to be taking its baby steps. To be absolutely positive that making that purchase online is more useful and efficient than taking a trip to the nearest mall is still not the case in Egypt – with a few exceptions.
Now the fact that most shopping websites are in English makes their perceived ease of use low for most Egyptians, except for educated segments of society. Websites and applications that arabize their interfaces – like Otlob, Jumia and Souq – are witnessing more success in the market than those who stick with English. However, if the perceived usefulness of the product and process is high, the perceived ease of use tends to move upwards along with it, regardless of other factors.
On the other hand, making online purchases in Egypt is not considered a social norm. To the contrary, stories of an online purchase going wrong or a bank card being charged a higher amount than the one due are common. Whether fabricated or real, these stories and norms greatly limit the reach and potential of the industry.
Is low credit card penetration a major factor?
In a country where the informal economy and labor make up more than 50% of the economy, access to banking accounts and services remains a major challenge -though not the primary one – to the spread of online shopping culture. In 2016, there were 3.5 credit cards per 100 individuals. Many successful online services and platforms, such as Otlob, have taken note of that early on and introduced cash-on-delivery options, greatly increasing their competitiveness amongst the majority of Egyptians not in possession of bank cards.
The sample studied in the aforementioned research, however, pertains to middle-class educated Egyptians of whom 80% own credit cards, meaning that low penetration of credit cards, contrary to popular belief, is not the main reason holding back the online shopping industry in the country.
“Findings showed that the main obstacle toward online shopping is the perceived risk not the lack of credit cards in Egypt,” the paper concludes. “Therefore, awareness about websites’ security issues should be disseminated, to promote online shopping among Egyptian consumers.” микрозаймы и займы онлайн без отказа