- Other Issues
- January 13, 2010
- 8 minutes read
Egypt’s answer to Amazon
CAIRO: The first thing you notice when you visit Sherif Nassar’s office in Ard el Golf, an upscale neighborhood in Cairo, is that he has no inventory on the shelf. In fact, he doesn’t even have shelves and yet he operates a retail outlet that is destined to be a major distributor of everything from computers to books to cosmetics and electronic products.
About a year ago, Nassar, an IT veteran who worked for IBM, decided to branch out on his own with the immodest goal of setting up a web portal to rival Amazon.com. He had a fairly straight forward business model – if you build it, they will come. What Nassar and his tech savvy staff are cooking up in Heliopolis is nothing less than a revolution in retailing that he hopes will change the consumption habits of Egyptian consumers. As he puts it – “we’re trying to put together a virtual mall – City Stars without bricks and mortar. But we’re not selling glamour – we’re offering the best products at the best prices in town and you don’t have to pay for parking. We deliver it to your front door,” he said.
The initial idea behind Nefsak.com – which translates into “anything your heart desires” – was to start by selling books online and delivering them overnight anywhere in Egypt. Nassar wasn’t out to reinvent the wheel; Amazon.com and thousands of other web portals have been successfully doing just that for over a decade.
What differentiates Nefsak.com is that it is tailor-made to fit the realities of the Egyptian market and one of those realities is that the vast majority of Egyptian consumers are reluctant to use credit cards when ordering online. Even the tiny minority who are willing to take that leap will only place orders with online retailers they trust like Amazon or Barnes and Noble. Circumventing that major obstacle was no small challenge for an Egyptian upstart like Nefsak.com – a brand that isn’t exactly a household name.
“I knew going into this that we would have a very small customer base if we depended on credit card orders. That’s why we went with a COD strategy – we do Cash on Delivery. Even then, we’re still facing resistance because COD is still considered a novel transaction for most Egyptian consumers. That really baffles me – I mean we have no problem ordering take away food and paying for it when it’s delivered. If we can order take away food – what’s the problem with ordering take away books. I think it’s just a matter of time and name recognition. We need to do a better job of getting the word out there and establishing a reputation for reliability. What’s encouraging is that we’re starting to see a lot of repeat traffic. Once they try us – they love us,” he added
It hasn’t all been smooth sailing for the young enterprise which celebrated its first anniversary on December 1, 2009. There have been mistakes and Nassar admits they could have done a better job of marketing.
“We expected that if we delivered on quality of service – it would instantly translate into quantity of orders. It hasn’t exactly worked out that way. The good news is that we’ve figured out that you can’t depend on word of mouth in this business so this year we’re going to really emphasize marketing. We got so absorbed in logistics, developing a reliable supply chain and working out the technical kinks – that we put marketing on the back burner,” he explained.
“Another great disappointment is that our original business model was focused on book sales but – fortunately or unfortunately – we’re doing much better with electronic products and cosmetics and our business plan was flexible enough to adjust and emphasize the products that our customers are willing to buy online.”
Nassar, who is an alumnus of the AUC, is somewhat disappointed with the English book sales. “Going into this, a lot of my friends warned me that Egyptians don’t read as much as they used to. Even newspapers have seen a decline in sales. It’s one of the things I’m trying to challenge and change. Call me an optimist but the way I see it – Egyptians don’t read as much because books are expensive and if we made them cheaper and offered a wider selection, we might encourage more people to develop healthier reading habits. Let’s face it – there are entire neighborhoods in Cairo and Alexandria that don’t have a single book store. People can’t buy books if they’re not available in the market. With all these new universities out there – there is a whole new generation that wants to read novels, business and self-improvement books. We have art and interior decorating books you won’t find anywhere in Egypt and many of our books are deeply discounted. I think the customers are out there – we just need to do more to get their attention,” Nassar said.
As the business grows, Nassar has big plans for Nefsak.com. “This is a nuts and bolts business. Even though Nefsak.com has assembled a technical staff that’s second to none, we’re not out to prove we’re technical wizards. This is a retail establishment and we’re expecting to see an exponential growth in sales this year. We’re going to grow – there’s no doubt in my mind about that – but our job is to deliver quality products to people’s front doors on time. We want people to come to us for the convenience and stay with us because of the value we deliver.”