Laila Adly, a retired English teacher living in Cairo, has long ordered all her grocery needs from a local store, usually by phone. Despite being one of Dokki’s last remaining standalone grocers, her favorite grocer ended up shutting down in the midst of the pandemic, facing fierce competition from bigger supermarket chains. She was then forced to take up the same consumption habits she’d once mocked her grandchildren for.
“I’ve always found smartphones a bit intimidating, and I never really had to use apps often because everything had been really convenient for me. I’ve lived in my current neighborhood [Dokki] for 30 years, there are many services around, everyone knows me, and I never really had to use these Uber-type apps,” explains Adly.
“I’m pretty independent, and I’m lucky that despite the overpriced hypermarkets that have emerged out of nowhere in the past decade or so, my local grocer, fruit and veggies stand, corner shop, and even the nearby coffeehouse my husband often visits, remained open over the years.”
Yet the pandemic and pandemic-related restrictions forced Adly and many others to change their habits. With the convenience of e-commerce and its reliability compared to traditional shopping means, she figured ordering her daily needs online might be worth a try. She was particularly drawn to e-commerce and convenience shopping apps upon realizing that many tech companies better adhered to coronavirus guidelines than their more traditional peers – local neighborhood stores that usually take orders by phone.
A MENA B2C E-Commerce Market report states that Egypt’s e-commerce sector is on the rise, witnessing growth rates of over 30% between 2019 and 2022. This is coming on the back of a cultural shift where the Egyptian market, which historically preferred cash payments given the lack of financial inclusion and a persistent digital divide, slowly but surely drives a regional e-commerce boom.
The shift could also be attributed to the country’s accelerating digital transformation strategy, which comes in line with the Egypt Vision 2030, and is boosting the country’s ICT infrastructure and its potential as a knowledge-based economy. With the Covid-19 pandemic influencing these cultural and consumption changes, Egypt’s e-commerce sector grew by 79% in 2020 as worldwide online shopping B2C numbers spiraled, according to stats by eCommerceDB.
“I simply don’t think it’s feasible anymore to be a business that doesn’t have some sort of online shopping component–it’s not enough to have a digital presence, I think you have to build your business model in a way that incorporates online orders and convenience shopping,” says Fawzia Saad, a budding entrepreneur who’s soon to launch a restaurant in Cairo.
“While our culture might seem averse to this, things are rapidly changing. Entire generations that continued to rely on telephone ordering well into the digital age are realizing the ample added value that convenience shopping apps have to offer,” she explains, highlighting her observation that former cultural skepticism around online ordering and online payments is fast-disappearing. This could also be attributable to the most populous Arab country’s FinTech boom, whereby the likes of Fawry have enabled the country’s massive unbanked population to make online transactions.
Food delivery app Talabat delivers to users in major cities nationwide, across the Delta and Upper Egypt as well as Cairo, Alexandria, Port Said, and others. Its grocery delivery arm, Talabat Mart, has been delivering to users in numerous cities for around a year, making grocery shopping as easy as a few clicks on a smartphone.
“The pandemic really changed the delivery app sector, and [the app] Talabat became a really great place to discover new restaurants and cafes around your house. In general, there was a big mindset shift, in our industry and others, where people realized that convenience shopping apps are a great service and continued using them throughout the pandemic,” says Hadeer Shalaby, Talabat’s Managing Director.
The app witnessed an 85% year-on-year increase in the number of users using credit cards, a seemingly well-deserved growth level given the company’s recent PCI DSS certification proving the app’s compliance with stringent data security measures. According to Shalaby, Talabat is one of the only companies in MENA’s food delivery domain that has achieved this certification, proving its user payment safety.
“Egypt’s recent data protection law is a big step. Although [Talabat] is also GDPR compliant, we’re definitely also looking forward to the government’s e-commerce law, which will regulate our relationship with the government, consumers, and partners. Hopefully, the new law will help us have a better business model for the country’s needs,” says Asmaa Khalil, the company’s Head of Communications.
Egypt’s e-commerce boom is perhaps clearest with the entry of global online shopping giant Amazon into the Egyptian market through its recent acquisition of Souq.com. While the sector has grown significantly in less than two years, even more promise seems to be ahead, particularly with the ripple effect across logistics and FinTech. Online shopping apps like Marsool and Jumia have also witnessed major gains and user growth during the pandemic, despite the adverse effect that heightened economic instability has had on other sectors.
“I’m not the most digitally savvy person and I don’t feel that even the pandemic could change that. But the accelerated changes of the past couple of years really force people to be agile. Strangely enough, this rapid optimization of innovation does contribute to more struggles for traditional businesses that can’t yet adapt, but it nevertheless brings ample gains to consumers,” concludes Adly.
Egypt’s e-commerce boom seems, for all intents and purposes, to be here to stay. Despite challenges brought forth by the pandemic, the shifting of consumption habits has accelerated digital transformation, proving that convenience shopping apps are yet to yield major wins