In Q4 of 2020, Egypt’s Consumer Confidence Index increased to 98 points, up from 85 points in Q2 in 2020
Egypt rose 19 spots to position itself in 7th place on this year’s Global Retail Development Index (GRDI) by global management consultancy firm Kearney, citing increased consumer confidence and growing digital shopping trends strengthened by the country’s growing internet penetration.
According to Kearney, Egypt’s retail market is estimated at around $200 billion in 2020 with expectations for growth at around a CAGR of 5% from 2020 to 2025 to reach $254 billion.
Citing several local, regional and international investments into the Egyptian retail and wholesale market, the report noted that the pandemic buoyed grocery retailers as consumers stocked up and stayed home, adding that it was “perhaps one of the reasons why investors are lining up to invest in Egypt’s retail and wholesale market.”
In Q4 of 2020, Egypt’s Consumer Confidence Index increased to 98 points, up from 85 points in Q2 in 2020, reflecting rising consumer confidence post-recession and currency devaluation recovery, Kearney pointed out in its report.
“Egyptian consumers love bargains. A recent survey found 61% of Egyptian respondents look for bargains during the Ramadan/Eid seasons, the biggest shopping periods of the year,” it added.
Digitally, the move towards digital payments has been swift. Almost 90% of consumers have high confidence in digital payments, up by 690%, for both in-store and on delivery transactions.
Driven by climbing internet and mobile penetration, which has supported the popularity of online shopping, the digital market landscape is estimated to grow at 5.4% CAGR between 2020 and 2025, reaching $835 million in 2025.
The Ministry of Communications & Information Technology said that from 2019 to 2020, Internet penetration grew from 47.6% to 57.3%. There is 94.5% mobile phone penetration.
“An emerging middle class, a growing population, and rising secondary cities are fueling sales in shopping malls, convenience stores, supermarket chains, and online retail platforms. Egypt consumers like to go out and shop, so retailers are benefitting from a new law requiring that all real estate projects have a commercial area,” it noted.
Accordingly, mass merchandisers, e-commerce, and home specialty retailers enjoyed CAGRs of 28%, 26%, and 21% respectively in the period of 2015 to 2020, with department and fashion stores expected to grow fastest from 2020 to 2025, growing at 6.8% and 5.7% CAGR respectively.
Driven by young, urban, and increasingly more affluent populations, Africa’s aggregate potential as an emerging retail market far outweighs problems associated with investing in what can still be risky and challenging individual nation-state economies, explained Kearney in their report.
Africa is a hub of mobile money transactions accounting for about 50% of all global transactions, it added, however e-commerce currently accounts for only about 1% of the total African retail market.