Retailers Tackles Real Estate Sector’s forecasts in one session
Amr Sheira, CEO managing director at CompuME introduced his company as a digital retail store that is present in various different countries. Their first mega store was in Dubai and their second was in Saudi Arabia Their headquarters are in Egypt and they are present in the market since 2000
They have strategic alliance with Telecom operators such as Mobinil, where they handle all their technical systems and aligns with Virgin Megastores as well where they display some of their products, as well as a strategic alliance with Virgin and Carrefour Express in Dubai.
CompuME is a store specialized in IT, Computers and Multimedia.
Sheira predicted that sales would increase by the second quarter of this year contrary to the first quarter.
Ali Ibrahim, Fashion Commercial Director of Ra Sport shared the company’s slogan: Sport the Fashion and stated that the company is not only a sport brand but they rather head towards fashion.
The company was established in 1998 by Ahmed El Tayebi and Adel El Sherkawy
The company includes retail brands such as Timberland, Geox, Reebook, Adidas, Levi’s, Quicksilver and Roxy.
The company is currently negotiating with 3 more brands, which names were not disclosed.
They own 66 stores in Egypt distributed through 6 countries.
Currently, they are implementing an expansion over 22,000 meters square.
Ali Ibrahim declared that 2011 was not an easy year; it required companies to stay alert and change some of their strategies. In 2011, the sales increased with 15% more than 2010 despite the recession facing the country.
Omar Soudodi, General Manager of souq.com highlighted the beginnings of the website.
Souq.com is a retail e-commerce website that was firstly launched in Jordan , Saudi Arabia and UAE in 2005 then expanded to Egypt in 2010 and Kuwait by the end of 2010.
He declared that the Souq.com Egypt attracts millions of monthly visitors from a number of 28 million online users. The buyers are not specifically Egyptian
He added that 40% of the buyers are resident in Cairo, 14% in Upper Egypt, 5% in Alexandria and Sinai and the rest are located in different countries.
He defined the website as an online channel that allows retailers to display their products.
The session was then directed to the questions and answers section where one of the audiences asked about the current changing situations and how it affects the business.
Amr Sheira replied: “Changes are very important even in critical times, their technology sector is changing as well and they need to survive and adapt to the changes facing them.
He stated that they were expanding physically as well. Trends are contributing to the product sales and the company is looking forward to the trends that are coming their way.
Everyone is now using computers but computers are coming to an extinct, due to the appearance of tablets, notepads and apple products (iPads and iPhones), hence, trends are controlling the market.”
Another question was directed to Omar Soudodi asking about the e-commerce market and its growth in Egypt.
He replied that he belongs to Generation X which witnessed 30% expand in online users, proving that the e-commerce market is growing significantly.
He pointed that there are only 6 major cities where all international products come to; they are not in Sinai, Delta or even Alex. So, you can’t open a store in each country you want your product to reach.
He referred that “souq.com” displays 60% international products and 40% local.
He stated that one of their very first retailers were “Crocs” whom sold 5 items in its first week online. This action excited the retailers very much as the buyers were located in Mansoura, Asyut, Banha and Damnhour.
He added also that after the revolution, everyone was on Facebook and Twitter. People use Twitter as their news source instead of TVs and Journals. Therefore he expects that e-commerce market would definitely grow in Egypt.
Ali Ibrahim replied “Optimistic, we have 12 more stores to open soon” when asked about his view of the market. He added that they have to adapt to the revolution and the current situations facing Egypt.
Regarding their expansion plan, he stated that this era of recession is short termed and they are going to recover because the country has faced a lot before and survived.
He added that they already launched an initiative in 2011 to contribute to charity. The “Timberland” initiative encouraged customers to exchange any old item with a new one. They received 20,000 garments that were given to charity.
He said that this is a momentum that every country should look for.
They are currently updating their software where they link all companies together and training their employees to increase their skills.
He declared that they would be concluding an agreement with “souq.com” soon.
He listed an experience in 2011 where most people in Delta used to shop either in Cairo or Alex, but after the revolution and the security instability, it was harder for them to move around so they had to purchase their needs from Delta, increasing Delta stores’ sales. Ali added that they provided them with all the needed products.
About any initiatives to partner with the ministry of Education likewise Dubai, Ali said that education in Egypt needs to take several steps before using high technology.
A memo of understanding was concluded with the ministry of education to ensure that the teachers, before the students, were qualified to use computers and high tech. This initiative was sponsored by the local bank and the ministry of education.
More international retailers are now using e-commerce in Egypt. Questions about the government’s stand and role was directed to Omar Soudodi
He replied: Any obstacles we face in our business are worth it. The current or future government should consider giving attention to e-commerce. He declared that they are working on a project that aims to sell all Egyptian products all over the world. The government can afford this as they have done a lot to the IT sector that has been witnessing growth. The internet business is growing over the last six months. This sector is benefiting the local market more than the local one.
He stated that 65% under the age of 30 are using the internet in Egypt and the Arabic content on the internet is only 1%.
Omar Soudodi was also asked about the direction of the online trend needing education, speaking from the retailer’s side not the consumer’s
He replied that 50% of buyers are first time users and they get several feedbacks form governorates. E-commerce ignorance in Egypt is very high; it decreased in 2009 but came to the high level after everyone has used the internet.
They help users through communication, explaining the concept of the website and online purchasing strategies.
He was also asked about the shopping experience growing as he expected.
He replied that the scale in Egypt is larger than the other countries since Egypt is the 2nd largest city in the world where we have 24 million consumers.
He added that already 88% of Egyptian online buyers are on foreign websites such as Amazon.
He declared that 3% of buyers on “souq.com” are over the age of 60.
He added that the sports section is joining very soon because if you –as a consumer- have all the products in one place, you could actually make a decision.
Finally, he added that they grew with the rate of 15-20% monthly in 2011.
Ali Ibrahim was asked about the effect of factory outlet stores located far at distance and why they don’t locate these stores in a highly populated area where original stores already exist.
He replied that factory outlet stores require big spaces for them to be established so the renters are low.
He pointed that the standard percentage of outlet stores are 20-25% dedicated to the factory outlet stores and 75-80% are dedicated to the original stores.
“It’s very critical; you have to study the location”. He added that outlet stores do not achieve same sales rate of original stores, they are in fact targeted to generate cash.
Omar Soudodi spoke stating that they signed with Disney, Dell and Intel to promote their products on their website. By this, they become the 4t distributer in the Middle East. They won’t hold all their products but hold the most demanded items.
“It is a growing market, if they have more products they could sell more”
When they first came to Egypt , they focused on #1 selling item but now they are focusing on a sports line that is coming on board
Regarding durable goods, he added that they align with Samsung so if you buy a big item like a fridge that needs installations, they do not intervene in the delivery, Samsung sends their crew to install the equipment.
