Egypt's Black Friday: Will consumers embrace discounts despite inflation, boycott campaign?
The buzz around Black Friday has been building up for weeks, with pre-Black Friday deals flooding the market since October and set to continue until late November. Retailers are leaving no stone unturned in their efforts to boost sales, offering a variety of incentives to entice consumers to intensify their purchases.
One prominent factor driving the surge in Black Friday excitement among Egyptian shoppers is the growing demand for online shopping. Recognizing this trend, retailers have been working diligently to enhance their mobile shopping experiences, ensuring a seamless and convenient transaction process for their customers.
This year's event, however, comes at a time of exceptional circumstances that raise concerns about consumer behaviour.
Factors such as high inflation rates, currency devaluation, and ongoing boycott campaigns against foreign products supporting Israel have generated uncertainty regarding consumer spending.
High Inflation
Despite a decline in the inflation rate in October to 38.5 percent, down from 40.3 percent in the month prior, it remains significantly high on an annual basis, placing a burden on citizens, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).
Amira Abdallah, a 28-year-old housewife, expressed her scepticism to Ahram Online, stating that despite the discounts, product prices are still exorbitant. "I think I won't buy this year at these prices," she said.
However, Mohamed Ahmed, a 35-year-old engineer, noted that despite the high prices, his relatives and neighbours find the offers attractive, with discounts up 70 percent, fuelling their desire to make purchases.
To counter potential tepid demand due to inflationary pressures, retailers worldwide, including Egypt, have resorted to offering larger early Black Friday discounts in October compared to previous years, according to Adobe Analytics.
Boycott campaign
Adding to the challenges, a significant boycott campaign against foreign products supporting Israel has gained momentum since the start of the Israeli war on Gaza. Thousands of Egyptians have supported the campaign on various social media platforms, sharing lists of Egyptian brands that should be favoured instead.
This movement could significantly impact purchasing behaviour, resulting in substantial losses for the blacklisted brands.
Social media influencers have vowed to remain steadfast in their boycott, regardless of the discounts offered by foreign companies supporting Israel, as a show of solidarity with the people of Palestine.
Ahmed Abdel-Moniem, an order processing senior operator at Jumia, shed light on the dire consequences of these circumstances.
He told Ahram Online that purchases during the current season have plummeted by more than 70 percent compared to previous years, attributing this decline to the impact of the boycott.
In particular, the blacklisted brands have borne the brunt of the crisis, as the majority of consumers have shifted to buying local products, he noted.
“To navigate this crisis, electronic sales platforms have resorted to partnering with Egyptian brands. By doing so, they hope to mitigate the adverse effects of the boycott and regain the trust of consumers,” Abdel-Moniem explained.
E-commerce in Egypt
In a recent CAPMAS study titled "The development of e-commerce in Egypt between 2011-2021," the agency reported that Egypt ranks first among Arab countries in terms of the percentage of exports from e-commerce.
Over the past decade, the country has witnessed a significant increase in total merchandise trade from 0.2 percent to 2.9 percent. Moreover, Egypt leads in the proportion of imports from e-commerce to total merchandise trade, with the figure rising from 3.5 percent to 4.8 percent.
The CAPMAS report is further supported by a recent publication from the Central Bank of Egypt (CBE), indicating that the number of Egyptians aged 16 and above who possess accounts in banks, Egypt Post, mobile phone wallets, or prepaid cards has risen to 44.6 million by the end of June 2023, up from 42.3 million at the end of December 2022.
In line with this upward trajectory, a report by Statista, a marketing research institution, projects that revenues from the e-commerce services market in Egypt will reach $11.4 billion by 2027, up from $6.7 billion in 2023, with an annual growth rate of 14.4 percent.
While Egypt has made considerable strides in the digital realm, it ranked 109th globally and 13th among Arab countries in 2020 on the Readiness Index for Online Trade between Businesses and Consumers published by the United Nations Conference on Trade and Development.
To further facilitate purchases, many retailers have expanded their reliance on buy now, pay later programmes, allowing buyers to make immediate purchases and pay in instalments or at a later date. This approach aims to make the shopping experience more convenient and affordable for consumers, ensuring they can take advantage of the enticing offers without straining their budgets.