06/28/2017

Online Egypt An Investment Opportunity?

The Internet may be driving business forward in many parts of the world, but in some regions, notably in the Middle East and North Africa (MENA), it’s having a bit of a tough time becoming fully integrated and established within mainstream society. Having said that, Internet use in Egypt, for example, has come a long way in a very short time.

However, although internet business banking, typically, is widely offered by Egypt’s vibrant financial sector, even there, many small and medium-sized enterprises have yet to exploit the online services available to any great degree. This is particularly so in Egypt’s tourism sector, a major contributor of GDP. Yet, if the figures are to believed, only 1 in 20 of tourism businesses make use of the Internet in any meaningful way. Now that’s a really surprising statistic given the importance of the industry.

Egypt is currently experiencing dramatic political and economic upheaval at the moment, a situation which has generated thousands of column-inches and interminable news reports in newspapers, radio and television stations around the world. So there’s little need to add to the coverage here. But, in passing, it is interesting to note how self-obsessed Egyptians have now become with the Internet since the 2011 revolution and the downfall of the oppressive Mubarak regime.

The point has been well made by a number of commentators over recent weeks and months. The pity is it took a revolution in order to bring this natural state of affairs about. How we in the West tend to take the freedoms which the Internet brings very much for granted.

It’s the young who’ve very much led the growth of internet usage in Egypt, just as they’ve done in the rest of the world. But when considering the most popular activities – email, searching for and downloading information – it’s a bit like looking at how the Internet was used in the United States some 10 or 15 years ago. But everything is now changing, catching up with the rest of the world.

Nowhere is this more apparent than in Egypt’s love affair with social media. The use of the likes of Facebook has soared in recent years, from a mere 4 million accounts in 2010 to something near the 12 million mark in 2012. More than 3 out of every 4 users are aged under 30. Indeed, there are more Facebook users in Egypt than anywhere else in the Arab world. Much of the upsurge has been driven by the growing popularity of smartphones and other such devices, used by almost half of internet users to go online.

But if social media is making major in-roads into everyday life in Egypt, the same can’t be said of online shopping. The typical Egypt bank may offer online banking and other bank account services, including as standard a debit or credit card, but in a country where cash is still king, it’s proving hard to change old habits. The statistics make that abundantly clear with a disappointing 2% of internet users shopping online in 2011. There are other reasons, too, including a lack of trust in online security.

However, even here, the landscape is slowly changing for the better, providing entrepreneurs both in Egypt and across the world with lucrative investment opportunities.

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