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06/05/2008

Consumer Tech in Egypt | Retail

Most of the discussion that I read here in the US about technology developments in emerging markets focus on product and price. OLPC is the classic example in this regard...a product that designed to be inexpensive and simple enough that every child in the world ultimately has access to one. Microsoft's Windows Starter Edition fits the mold, as do Nokia's efforts to create products targeted to these markets.

However, before one can talk about product or price, the question of distribution needs to be addressed ("placement" if we are sticking with the Ps, although that word has always felt inadequate).

In markets like Egypt, the lack of quality retailers has long been a barrier to the growth of consumer technology spend. While the well-traveled buyer could pickup their gadgets on a trip overseas, everyone else was stuck paying too high a price for outmoded and poorly supported products. This is changing, and the emerging retail landscape is a great predictor of the ways in which consumer tech is moving.

The leaders in Egypt are the mobile carriers themselves. Companies like Mobinil have made serious investments in the customer experience of their retail locations. The staff is extremely well-informed, the stores are beautiful and the service level is best-in-class. When you walk in the store a host helps to direct you to the right area or person. The products are clearly displayed and the signage around their features is clear and extremely helpful. I would put the retail experience of the Mobinil and Vodaphone stores up there with a AT&T or Verizon store here in New York. The pictures I've posted will help to visualize some of this.

New-comer Etisalat has looked to jumpstart its market entry through a deal with Egypt Post.

However while those in the market for a mobile phone have a number of good options, anyone looking for computer hardware, software or accessories, including digital cameras, will need to work a bit harder.

The main retailers are small "mom & pops" with very little selection. These can be found throughout Cairo, and particularly in a couple of large flea-market-like malls with aggregations of small stores and stalls.

The major retail trend, which mirrors the rise of suburban developments outside of Cairo, are the huge malls on the outskirts of the city. These massive retail centers, offer everything imaginable, including large selections of consumer technology and electronics. Interestingly the largest of these is the local branch of the Virgin Megastore.

(NB: I have focused on what I was able to observe with physical retailers. I am less sure about direct retailers such as Dell and Apple. Dell does have a Middle East ecommerce site, but I cant say much about it.)

In order for people to spend money, they need access to reputable merchants whom they trust to provide quality, up-to-date products at reasonable prices. From what I saw during this last trip, the mobile carriers are the ones to beat in Egypt.

June 5, 2008 in Technology, Telecom | Permalink

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Comments

I have enjoyed very much the articles on Egypt . One point that I disagree about computers , hardware and digital cameras vendors - not anymore the moms & pops shops with the current retail boom the IT retailing is developing and witnessing high growth rate. this is driven by the demand and presence of mega malls such as City stars, computer malls across the country. The presence of international brands is driving the trend and helping the penetration of decent outlets selling IT in a professionl and decent environment. Apple for the example has recently opened their second showroom, Sony is expanding, in addition to local companies such as Bitech with a network of more than 40 outlets.

Posted by: sahar nazmy at Sep 6, 2008 2:42:52 PM