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Government study projects 50% growth in e-commerce in Egypt amid COVID-19

Published 20 Jun,2020 via Daily News Egypt - A policy paper by the Institute of National Planning (INP) has found that the demand for e-commerce in Egypt has increased due to the novel coronavirus (COVID-19) pandemic.

The study, entitled “The possible repercussions of the Corona crisis on the Egyptian economy”, found a commensurate recession in traditional shopping methods. This has particularly been the case with the state-imposed precautionary measures in place to prevent the virus’ spread.

In pre-coronavirus times, it is estimated that only 8% of Egypt’s total number of Internet users made online purchases, or about 48 million users.

But with the spread of the virus and the precautionary measures, Egyptian consumer habits changed exponentially, with the volume of e-commerce expected to increase by at least 50% in the coming period.

Although big discounts and offers put in place by e-commerce sites are a major attraction for consumers, this has yet to make significant inroads to local online purchase bills, which do not always make use of this.

The study added that the spread of the coronavirus and the measures set up to curb its spread has been a watershed moment for local and global e-commerce. With a large number of consumers staying at home, there has been a significant increase in demand for e-commerce.

Fears of infection have meant that elderly and pregnant consumers are now more likely to resort to using shopping services via phone or through smartphone applications. This in turn has meant they are putting aside their traditional purchasing norms, to avoid mixing and exposure to corona infection.

The growth of e-commerce has contributed to increased demands on other activities, such as shipping and delivery companies, and electronic payment systems. The fear of transmitting infection through cash exchanges has caused a recovery in online payments that had previously only seen significant use in online purchases.

The study also indicated that the virus has caused a significant change in what is sold through e-commerce sites. This includes face mask sales which have recently seen a 590% increase, hand sanitizer purchases up 420%, gloves by 151%, and soap by 33%.

The study suggests a number of measures to stimulate e-commerce and support its continued growth. These include developing a national strategy for e-commerce, the quick adoption of laws regulating e-commerce, integrating the formal and informal markets, and adopting a national digital identity and smart card for every citizen.

The study also called for the enactment of legal, customs and tax legislation to regulate financial transactions in e-commerce systems. At the same time, this would encourage banks to establish a sophisticated system that accepts e-commerce transactions and adopts electronic payment systems. It would also see the adoption of an electronic signature system, and adding an electronic stamp service, which allows the expansion in use of e-signatures.

E-commerce applications on mobile phones would also be made available, alongside the development of platforms for this. The study noted that there needs to be greater encouragement for those platforms to offer further discounts to their customers to attract them to electronic commerce.

© 2020 Daily News Egypt.


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