Stronger public-private sector cooperation needed to boost user confidence and e-commerce adoption in Egypt
Egypt is lagging behind other regional and international countries when it comes to broader adoption of e-commerce services, according to Omar Soudodi, General Manager of Souq.com Egypt, the largest e-commerce marketplace and auction website in the Arab world.
Drawing on vast experience of successful e-commerce applications , Soudodi maintains that many of the hurdles to broader adoption can be overcome through stronger public-private sector cooperation and the need for service provider to adopt business models that boost confidence among Egyptians to utilize the Internet more at work and in their daily lives.
“As of 2008, Egypt enjoys an internet penetration rate of approximately 16.7 percent which is significantly low when compared to other countries with similar social-economic circumstances,” said Soudodi. “This also represents tremendous growth opportunities for Internet service providers (ISPs) and providers of online services, particularly since the market is underserved and a much larger portion of the population is yet to be introduced to a broad range of online services.”
Souq.com identified several inherent factors that have impeded the adoption of Internet and advanced e-commerce services, namely lack of trust in the security and authenticity of e-commerce in general, the lack of alternative electronic payment facilities and low penetration of credit cards in the Egyptian market, as well as socially driven factors such as resistance to change towards modern, IT based approaches to purchasing and to conducting business. Soudodi believes that creating a model that eliminates or reduces the number of these factors could help overcome these impediments to adoption and enable online service providers to serve Egyptian consumers and businesses better.
“Although the public sector has taken important provisions to move Ministries and other government organizations onto the Internet, small and medium businesses (SMEs) and micro-businesses are widely seen as the growth engine for Egypt to move towards an information economy,” said Soudodi. “Egyptian small businesses make up the majority of Egypt’s private sector and must be empowered to take full advantage of the sales and growth potential that the Internet offers, helping them to increase national GDP and move towards an information economy.”
Soudodi stressed it is of significant importance that service providers and leaders in e-commerce develop service models that encourage SMEs to take advantage of the Internet, to drive business forward and quickly cross the bridge between traditional commerce and towards today’s global e-commerce practices.
“Souq.com has excelled in delivering successful e-commerce / online shopping services across the Arab world by building the core functions that increase service usage and adoption. In Egypt, we are looking at different approaches to overcome the unique challenges such as low credit card penetration while simplifying online purchases and payments for Egyptians, giving users complete peace of mind throughout the entire purchase cycle,” said Soudodi
According to a report by the Egyptian Ministry of Communications and Information Technology (MCIT), internet penetration in Egypt reached approximately 16.7 percent (or 12.57 million users) in 2008, and that of the 60% of large Egyptian enterprises adopting the Internet for business, almost 80% of them are using the Internet just for sending and receiving emails while only 26% of these enterprises are leveraging the Internet to deliver products or services online.
- Egypt: Internet users spend US$ 2.1 billion on retail e-commerce
- Tunisia’s Internet users spent over US$ 132.7 million in B2C e-commerce during the past 12 months
- MENA Internet users 3.1 million
- Saudi Arabia: Internet users spent over US$ 3.28 billion in B2C e-commerce during 2007
- E-commerce adoption in Morocco growing at a healthy rate