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Egypt: Amazon dips toe in African e-commerce; it’s not going well

By Sherif Tarek
Posted on Wednesday, 15 September 2021 18:48, updated on Tuesday, 21 September 2021 09:54

Amazon in Egypt photo via Twitter)

The US e-commerce giant Amazon, has opened its first African logistics centre in Egypt. But so far, initial feedback from customers has been negative.

Bahaa Nasser, a telesales supervisor at a pharmaceutical company, ranted on Facebook about his maiden transaction via Amazon Egypt after attempting to return an unresponsive remote control.

Throughout the process, Nasser says he has experienced different nuisances, compounded by his far-flung residence in the Mediterranean city of Marsa Matrouh, near the border with Libya. The 31-year-old’s complaint made the rounds, and so did others.

No sooner had Amazon officially launched in Egypt, than customers voiced their disgruntlement over changes it has brought about, raising questions over the suitability of the service that the e-commerce giant offers to Egyptians, as opposed to those from more locally-implanted rivals.

Screenshot from Amazon.eg Facebook account

Amazon’s Egypt launch

On 1 September, the US firm announced the advent of amazon.eg, which immediately replaced souq.com, the e-commerce platform (based in Dubai), which Amazon acquired in 2017 for $580m.

A day earlier, Egypt Prime Minister Mostafa Madbouly, among other ministers and government officials, attended the inauguration of Amazon’s 28km-squared fulfilment centre (a cutting-edge warehouse where orders are received and shipped out) in Sharqia province’s 10th of Ramadan City, east of the Nile Delta.

This is Amazon’s first logistics operation in an African state, with investments worth LE1bn (nearly $63.6m). Egypt is also the third country in the Arab world that Amazon has tapped, after the UAE and Saudi Arabia, where Souq became amazon.ae in 2019 and amazon.sa last year, respectively. Today, Amazon Egypt has 3,000 employees.

Keeping its original name over the past four years in Egypt, Souq, under the management of Amazon, proved quite popular among online shoppers in the north African country.

Yet for a fortnight following the rebranding, legions of users have taken to social media with complaints varying from glitches; late or faulty deliveries; poor packaging; higher prices; lack of user-friendliness; to unfavourable changes to the returns policy.

Shipping returns

Nasser received an email from Amazon, which stated – without citing a reason – that sending back the company’s delivery person to pick up the remote control was an “unavailable” option in that particular case. Instead, the buyer was asked to send the product via the post office or a courier, and later be reimbursed for a shipping fee that doesn’t exceed LE320 ($20).

“When I contacted Aramex I found out that shipping [the remote] from Marsa Matrouh will cost LE220, and this is the lowest weight category,” Nasser tells The Africa Report, bemoaning the fact that Souq used to send its delivery personnel back to him for returns.

[…] the credit I was given was worth LE112. That’s the price of the item without the shipping cost; I paid LE138 overall.”

“What if I don’t have that kind of money? And what if I had ordered a TV or something big? It means the fees would’ve been up to LE500 or LE600,” says Nasser, who was agitated for not being notified of policy changes. “In all cases, it doesn’t make sense that the Amazon courier would deliver something to a certain point but can’t take it back from the same place.”

‘Locally relevant’

Generally speaking, Mahmoud Hamouda, a strategy and operations consultant at Dell Technologies, believes it’s essential that apps are tailored for locals.

He cites Nigeria as an example of an African country where apps are “locally relevant” for the most part, with some, for example, designed for those who do not use smartphones, which are not yet ubiquitous in the west African state.

In Egypt, many apps offering features like buy now, pay later (BNPL) are identical to overseas apps, as copycat developers do not take into consideration cultural nuances, Hamouda opines. This is not quite the case with Amazon, yet the company might be facing a similar challenge in Egypt.

Different circumstances

Having been a user of Noon – an e-commerce service operating in Egypt, Saudi Arabia and the UAE – Nasser knows that an Aramex courier can take quite some time to arrive at his doorstep.

“Noon always dispatches their packages via Aramex, and I know it can take time because Aramex won’t send the delivery person [to Marsa Matrouh] unless he/she has enough packages to deliver,” he says, praising Noon for always arranging shipping of his returns without involving him.

The other option is the post office, “and you know [what] that is like; things can get lost or damaged and there is no tracking,” says Nasser. “Or, it could arrive late,” after the period during which bought items can be returned.

“Some people [on social media] kept telling me it’s the same policy in the US. Well, things are different here,” he says. “For instance, Amazon has widespread drop-off points to gather returns there, while here we have none.”

Nasser’s refusal to ship the remote back became categorical upon realising that in cases where Amazon turns out to be not at fault, the company would not refund customers the shipping fees. “This means I could just lose more money,” he says.

‘Not everything works everywhere’

“When they decided to tap into the Middle East they bought [Souq]; they grew in [the region] organically,” says Hamouda, who is also the head of Dell for Entrepreneurs in Egypt. “So in a way, this is an acknowledgment that they know this market is different.”

However, on the other hand, “Amazon is a conglomerate, so it has central processes that must be followed everywhere, and not everything works everywhere,” he tells The Africa Report.

[…] the amount cannot be transferred into a bank account. To do so, I needed to add a bank account in advance, and the step cannot be taken retrospectively.”

It’s too early to assess the Amazon Egypt experience as beginnings are usually fraught with problems and setbacks, Hamouda notes, highlighting that Souq’s staff in Egypt were not replaced after the rebranding and they most certainly know the market inside out.

Certain developments could enhance the Amazon Egypt shopping experience in future: for example, anticipated expansions, and weeding out sellers; as the company tolerates no more than 1% of the Order Defect Rate (ODR), which measures orders with one or more indicators of poor customer service.

Currently, ongoing efforts to digitise various services across Egypt, shrink the number of unbanked citizens and develop the post office branches and services nationwide ought to give an extra boost to e-commerce in the coming years.

Credit transfers

Eventually, Nasser was informed that he did not need to return the remote controller as the purchase money was transferred into his gift card balance, a move that made him realise another change to the Souq service he was accustomed to.

“To begin with, the credit I was given was worth LE112. That’s the price of the item without the shipping cost; I paid LE138 overall,” Nasser says. “Also, the amount cannot be transferred into a bank account. To do so, I needed to add a bank account in advance, and the step cannot be taken retrospectively, as I was told.”

Nasser says Souq showed a lot more flexibility when it came to transferring credit. “Once, they returned the money in a cash transfer under my name at the post office, even though I did not have an account there,” he says, adding that he also had the option to add bank account details at any time to make a transfer.

With the standoff persisting, Nasser lodged a complaint at Egypt’s Consumer Protection Agency, a step other users on social media said they had or will resort to over different unsolved disagreements with Amazon.

No Amazon official could be reached for a comment on this story.

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