About retail business in Egypt

1. Summary of Retail in Egypt 2018 Report of
Euromonitor International
By. Sameh Abuelela
DBA- in Progress 2021
https://www.linkedin.com/in/sameh-abuelela-66875218/

2. 1- DISCOUNTERS IN EGYPT
HEADLINES
In 2018, discounters record 82% current value growth to reach EGP32.3 billion Discounters becomes preferred choice for grocery shopping
during periods of high inflation Foreign discounter chains eye expansion in Egypt Discounters is predicted to record a 20% current value CAGR (a
10% value CAGR at constant 2018 prices) to reach EGP81.2 billion in 2023.
PROSPECTS
• Discounters Becomes attractive as Consumers Struggle with Inflation and Rising Food Prices.
• Discounters Becomes Key Channel for Fmcg Players and Local Suppliers.
COMPETITIVE LANDSCAPE
• Kazyoun Follows Massive Expansion Strategy.
• Egypt Remains the Second Most Important Market for Bim.
• Existing Grocery Stores Consider Joining Discounters
2- CONVENIENCE STORES IN EGYPT
HEADLINES
In 2018, convenience stores record current value growth of 18% to reach EGP1.9 billion. Import tariffs lead to retailers seeking local suppliers with
saturation in major cities such as Cairo and Alexandria, players look to other areas for expansion. Convenience stores is predicted to record a 14%
current value CAGR (a 4% value CAGR at constant 2018 prices) over the forecast period to reach EGP3.5 billion in 2023
PROSPECTS
• Convenience Stores Continues to Secure Share in Egyptian Grocery Landscape.
• New Import Policies and High Inflation Favor Local Suppliers.
• Saturation in Key Cities Leads Expansion in New Cities
COMPETITIVE LANDSCAPE
• Quick 24 Hours Remains Leading Convenience Chain in the Country.
• Forecourt Retailers Remains Key Competitor to Convenience Stores in Egypt
Given the similarity in product categories, forecourt retailers is the key competitor to convenience stores in the country. Chains such as On the
Run, operated by La Poire is widely present across petrol stations in the country, yet most retailers and customers perceive the brand as a
convenience store. However, most convenience stores aim to provide a better store service, environment and layout to differentiate and create a
preference among consumers. This is also leading convenience stores to open in closer proximity to schools, colleges and healthcare institutions.
3- DEPARTMENT STORES IN EGYPT
HEADLINES
In 2018, department stores declines by 1% in current value terms, falling to EGP19 billion. Department stores struggles to save share against
internet retailers. Holding Trading Co retains strong lead with a 46% value share in 2018. Department stores is predicted to record a 9% current
value CAGR (stagnation in value terms at constant 2018 prices) over the forecast period to reach EGP29 billion in 2023
PROSPECTS
• Declining Outlet Numbers.
• Struggle to Save Its Existence.
• Department Stores in Egypt Must Embrace New Techniques.
Department stores in Egypt may need to adopt new strategies to improve the in-store shopping experience to withstand the shift by many
customers towards internet retailing. Department stores in Egypt used to be a prevalent and desirable retail channel for purchasing various brands
in physical stores, yet this experience is now being replaced by internet retailing.
COMPETITIVE LANDSCAPE
• Omar Effendi Leads.

3. • Hypermarkets Competes with Department Stores.
• Debenhams Presents Active Wear.
4- DIRECT SELLING IN EGYPT
HEADLINES
In 2018, direct selling posts 14% current value growth to reach EGP1.1 billion. Continued restriction on imports leads to problems for various
brands. Oriflame Egypt Co continues to dominate direct selling with a 54% value share in 2018. Direct selling is predicted to record a 12% current
value CAGR (a 3% value CAGR at constant 2018 prices) over the forecast period to reach EGP1.9 billion in 2023
PROSPECTS
• Direct Selling Is Well-known Amongst Egyptians.
Despite a notable improvement in store-based retailers, direct selling remained popular amongst Egyptians in 2018, as they tend to trust word of
mouth recommendations from friends and family.
• Internet Retailing and Social Media Are New Platforms for Marketing and Selling.
• Beauty and Personal Care Remains Key Category for Direct Selling.
COMPETITIVE LANDSCAPE
• Oriflame Continues to Lead Direct Selling.
• Avon Continues to Face Challenges.
5- HEALTH AND BEAUTY SPECIALIST RETAILERS IN EGYPT
HEADLINES
In 2018, health and beauty specialist retailers records 8% current value growth to reach EGP127.8 billion. Chemists/pharmacies face shortages of
medical supplies. El Ezzaby Pharmacy leads highly fragmented channel in 2018. Health and beauty specialist retailers is predicted to record an 11%
current value CAGR (a 2% value CAGR at constant 2018 prices) over the forecast period to reach EGP218.6 billion in 2023
PROSPECTS
• Chemists/pharmacies Faces Shortage of Medical Supplies.
• Trending Social Media Leads to Consumer Shift Towards Natural Products.
• Import Restrictions and Tariffs Impact Beauty Products Sales Through Specialists.
COMPETITIVE LANDSCAPE
• Nefertari Benefits as Local Cosmetics Brand and Its Natural Offerings.
• Imported Brands Consider Withdrawing Due to Impact of Price Hikes.
• Larger Chained Pharmacies Lead but Encounter Egyptian Pharmaceutical Union.
Large pharmaceutical chains such as El Ezzaby Pharmacy (87 stores) and Seif Group (59 stores) across the country during 2018, led the
channel. However, their long-standing presence has given them power in deciding the direction of the channel regarding pricing. Unfortunately,
over time this has led to negative repercussions so that some big chains control the quantities of most of the drugs from the distribution
companies, which is disadvantageous to smaller players. The Egyptian pharmacists’ union and Ministry of Health are actively looking into this
matter to urge the government to take stronger action and promote better collaboration between them when discussing any price movements.
Parallel trade activities are another reason strengthening such a mechanism and impacting prices as many chains acquire supplies from various
traders across the borders at cheaper prices and enjoy higher margins, without passing the lower cost benefit to the end consumer, especially for
customers who have no choice but to purchase imported medicines due to quality or other aspects.
The bigger chains are engaged in active advertisements, discounts and offering free gifts, while smaller pharmacists cannot offer such hefty
discounts lower than the original price, as they find themselves at unequal competition with big chains.
In June 2018, article 30 of the Pharmacists Act stipulated that the license to establish a pharmacy could only be granted to a pharmacist licensed to
practice their profession, in addition, to the fact that the pharmacist may not be owner or partner in more than two pharmacies.

4. 6- HOMESHOPPING IN EGYPT
HEADLINES
In 2018, homeshopping declines by 11% in current value terms, falling to EGP97 million. Consumers become less enthusiastic about homeshopping.
Tamima Group leads homeshopping with a 42% value share in 2018. Homeshopping is expected to record a 9% current value CAGR (marginal value
growth at constant 2018 prices) over the forecast period to reach EGP150 million in 2023
PROSPECTS
• Television Is the Strongest Medium for Advertising.
• Negative Reviews and Official Warnings Influence Channel’s Performance
Harsh negative customer reviews are damaging the further development of homeshopping in Egypt. The Consumer Protection Agency in Egypt
has warned against dealing with shopping companies via either television or the internet. The head of the agency has stated that he has received
many complaints, whereby consumers have been harmed by purchasing goods that have proven to be invalid, especially mobile phones. He
highlighted that some companies are selling defective and counterfeit goods as international brands with false guarantees, which causes material
damage to both consumer and the global brand. The number of misleading advertisements have increased, whether through newspapers or
satellite channels and even broadcasts from outside of Egypt
• Homewares and Appliances Remain Most Popular Homeshopping Products
COMPETITIVE LANDSCAPE
• Tamima Group Continues to Lead Homeshopping Players Face Aggressive Competition from Internet
Retailing.
7- HYPERMARKETS IN EGYPT
HEADLINES
Hypermarkets records 28% current value growth in 2018 to reach EGP17.6 billion. Hypermarkets remains core area of investment for regional and
international grocery retail chains. United Arab Emirates-based Majid Al Futtaim eyes Egypt for Carrefour’s further expansion. Over the forecast
period, hypermarkets is predicted to record a 14% current value CAGR (a 5% value CAGR at constant 2018 prices) to reach EGP34.3 billion in 2023
PROSPECTS
• Hypermarkets Dependent on Foreign Investment
Majid Al Futtaim from the United Arab Emirates has been at the forefront of developing shopping centres in the country with a total gross
leasable area of 241,000 sq m with the Mall of Egypt, City Centre Alexandria and City Centre Maadi, where the franchiser’s brand Carrefour is the
flagship hypermarket. Savola Group, from Saudi Arabia and Lulu Group from the United Arab Emirates have been key investors in hypermarkets in
Egypt. As per data published by the General Authority for Investment in Egypt (GAIE), the United Arab Emirates remains the leading foreign direct
investor in Egyptian retailing. Majid Al Futtaim leads foreign investment for hypermarkets in Egypt through Carrefour, as it expanded across the
country along with Lulu Hypermarket (Emke Group). Hypermarkets proved successful in Egypt since the channel arrived and it is expected to record
growth in outlet numbers over the forecast period. With greater interest from regional and foreign players and absence of local investors, the
development of hypermarkets is highly dependent on foreign investment in the country
• Difficulty in Accessing Land Leads to Hypermarket Expansion in Suburban Areas
One of the key challenges faced by hypermarkets’ development in Egypt has been access to land in feasible or ideal locations. With populations
concentrated in the central regions in the cities, access to greater space is a challenge given hypermarket outlets require larger plot sizes and
sufficient area for development of carparks. Therefore, most hypermarkets are located in suburban areas, located outside of the key cities.
• Hypermarkets Favored Due to Wider Availability of Discounts and Promotions
COMPETITIVE LANDSCAPE
• Carrefour Leads Hypermarkets in Egypt with Strategic Expansion Plans.
• Lulu Group Eyes Egypt for Regional Expansion and Entry to Africa

5. 8- INTERNET RETAILING IN EGYPT
HEADLINES
In 2018, internet retailing records 33% current value growth to reach EGP6.8 billion. Development of payment eco-systems to facilitate growth of
internet retailing in Egypt. Regional players look to enter Egypt. Internet retailing is expected to record a 28% current value CAGR (an 18% value
CAGR at constant 2018 prices) over the forecast period to reach EGP23.7 billion in 2023
PROSPECTS
• Digitization to Support Stronger Development for E-commerce Landscape.
• Youth Is Driving Force Behind Internet Retailing’s Performance.
• Online Payment Gateways to Facilitate Payment Infrastructure.
COMPETITIVE LANDSCAPE
• Jumia.com Continues to Lead Internet Retailing in Egypt.
• Players Continue to Invest in Internet Retailing.
Domestic consumer numbers reveal the increasing popularity of online shopping as a higher number of Egyptians opt to stay indoors and avoid
crowded streets and bad weather conditions, which is evident in the decline in footfall in physical stores. The ongoing shift towards internet
retailing by local consumers has led many retailers across Egypt to invest heavily in promoting their e-businesses. One of the leading electronics
manufacturer and retailers, El Araby Group is actively promoting online retail and is continuously looking into the digitization of its retail
activities. In addition, apparel stores such as Zara, Bella Donna, and many others offer online purchases. Furthermore, certain product categories
are more popular online compared to others, such as mobile phones and electronic devices, while homewares and home furnishings internet
retailing recorded high value growth, but held low value sales. Therefore, a number of electronics and appliance specialist retailers are developing
online webstores and offering attractive discounts to compete with pure online players. Many customers wait for the sales season such as Black
Friday to make their purchases. Although Black Friday was not originally an Egyptian sales season, the increasing influence of social media and
international shopping websites has resulted in many Egyptians waiting for this date to save money on deals.
• GCC Apparel Retailer Namshi Eyes Egypt for Expansion.
United Arab Emirates-based apparel retailer Namshi plans to expand in Egypt during 2019 to take on the opportunity of a growing online retail
market with young and tech-savvy customers. The expansion plan comes as Namshi’s plan to enter Africa, after years of successful operations in
the GCC, prominently United Arab Emirates and Saudi Arabia. With a high population and recovering economy
9- MOBILE INTERNET RETAILING IN EGYPT
HEADLINES
In 2018, mobile internet retailing records 39% current value growth to reach EGP151 million. Government’s focus to increase mobile connectivity
with 4G roll out to boost mobile internet retailing, given high mobile penetration rates. Integrated mobile platforms become an important decision
for pure play and bricks-and-mortar players. Mobile internet retailing is expected to record a 35% current value CAGR (a 24% value CAGR at
constant 2018 prices) over the forecast period to reach EGP677 million in 2023
PROSPECTS
• Emerging Fintech Players to Ease E-payments in Egypt.
Mobile internet retailing is expected to record the highest current value growth within overall internet retailing in Egypt over the forecast
period. Such growth stems from the high growth in the penetration of smartphones and other mobile devices in Egypt. Smartphones are now
considered a fundamental gadget for most Egyptians. With the dynamic growth of internet shopping in Egypt, these factors have favored growth
through mobile platforms. In an attempt to ease the process of online payments to pave the way for mobile internet retailing, the Egyptian
government has hosted the first e-commerce summit in the Middle East and North Africa (MENA) region to review the various new trends,
technologies and technical tools in the region's digital commerce. The forum is expected to become an annual forum for business owners who rely
on e-commerce, experts and specialists to discuss the latest developments in this field and ways to develop it through various electronic solutions
and innovations, which contributes to the transformation of mobile internet retailing in the region.
• Development of Mobile Apps to Facilitate Mobile Internet Retailing.

6. Initially, mobile applications were limited and unregulated, but eventually began to take a more focused approach to what users prefer. Many
key players have developed their mobile applications such as Souq.com and Jumia that enable customers to conduct their purchases.
• High Consumer Engagement on Social Media to Facilitate Mobile Internet Retailing.
COMPETITIVE LANDSCAPE
• Jumia Improves Shopping Experience Across All Device Platforms.
• Mobile Wallets Pave the Way for Mobile Internet Retailing.
• Online Supermarkets Develop Mobile Applications
10- SUPERMARKETS IN EGYPT
HEADLINES
In 2018, supermarkets record 17% current value growth to reach EGP39.6 billion. Supermarkets offers extended opening hours with increasing
number of women joining the workforce. Mansour Mfg. & Distribution (MMD) holds narrow lead of supermarkets with a 15% value share in 2018.
Supermarkets is predicted to record a 13% current value CAGR (a 4% value CAGR at constant 2018 prices) over the forecast period to reach
EGP73.8 billion in 2023
PROSPECTS
• Supermarkets Offers Price Promotions to Maintain Volume Growth.
• Struggle to Import Goods.
• Women Joining the Workforce Has a Positive Impact.
As expected, the increasing female participation in the workforce has had a positive impact on overall growth in general, and grocery retailers in
particular. It has led to longer working hours, especially in supermarkets and hypermarkets where many women work. In addition, almost all
supermarkets provide a standard delivery option where one orders products from the store and has them delivered to the home at a negligible
cost. It is expected that an increasing number of women will join the workforce to support their families, especially following Egypt’s economic
difficulties.
COMPETITIVE LANDSCAPE
• Local Players Hold Stronger Presence in Supermarkets
Supermarkets in Egypt is dominated by local brands such Kheer Zaman and Metro, which are both owned by Mansour Mfg. & Distribution
Company, the leading operator in the channel, in both outlet and value share terms. Fathallah Gomla Market ranked second in terms of outlet
coverage and holds the third largest value share. In addition, other local players such as Zahran, Seoudi and Abbanoub Inter Trade Co (Aba) also
have a strong presence
• Carrefour Market Regains Leadership in 2018.
• Government-operated Supermarkets Remain Popular
11- TRADITIONAL GROCERY RETAILERS IN EGYPT
HEADLINES
In 2018, traditional grocery retailers record 2% current value growth to reach EGP318.8 billion. Channel loses share as modern grocery retailers
expands. Traditional grocery retailers remain dominant for food specialist retailers such as bakeries and butchers. Traditional grocery retailers is
predicted to record a 5% current value CAGR (a -4% value CAGR at constant 2018 prices) over the forecast period to reach EGP407.8 billion in 2023
PROSPECTS
• Traditional Format Retains Dominance of Grocery Retailers.
Traditional grocery retailers remained a dominant channel within overall grocery retailers in Egypt in 2018. With almost 46% of local households
residing in urban areas, and concentration of urban population in several cities primarily in Cairo, modern grocery retailers faced a challenge to
expand in wider geographical settings. Additionally, traditional grocery retailers also remained a very strong component of grocery sales in urban
settings, which is associated with the ease of opening a mom-and-pop store in a neighbourhood area, aided by the nature of many specialist
grocery retailers such as bakeries, dairy and cheese sellers, and butchers. As these outlets are conveniently located in local neighbourhoods, they
also offer credit to customers. Poor public transport also facilitates sales of groceries through these neighbourhood stores, which are usually in
walking distance and can be accessed for immediate grocery needs.

7. • Unorganized Traditional Retail Poses Challenge to Shift Towards Modern Grocery Development.
• Traditional Grocery Retailers Loses Share to Modern Format
The establishment and the expansion of discounters and hypermarkets negatively affected the value share of traditional grocery retailers, as
many consumers made the switch to modern channels such as discounters or even online, due to stock limitations in traditional stores.
COMPETITIVE LANDSCAPE
• Traditional Grocery Retailers Remains Highly Fragmented.
• Lack of Government Regulations.
• Street Vendors Remain a Key Highlight
Street vendors and kiosks remained the key players in traditional grocery retailers in Egypt in 2018. Usually street vendors are found in areas
near national companies that have a large number of employees, including women. Moreover, they can also be found across major roadways, at
traffic lights, selling ordinary items such as lemons or vegetables.