WATANI International
12 December 2010
Despite the recent global financial crisis that has left millions across the world suffering in its wake, online trade is booming and gaining new ground by the day. Most economic experts expect the size of electronic commerce worldwide to reach some USD8 trillion by the end of 2010. However, with 80 per cent of e-commerce localised in the United States, followed by Europe and Asia, Arab countries—with only a 0.5 per cent contribution in the field—have a long way to go along that path before they can join rank with developed countries.
Auspiciously, Egyptians now realise the importance of adopting modern technologies and trends instead of stagnant, traditional norms in order to counter world changes on one hand and confront economic challenges on the other.
On the right track
“Online trade is now very common in developed countries, but in Egypt we still need awareness, follow up and communication between the parties involved, whether companies or individuals”, says Hussein Omran, head of the International Trade Point in Egypt’s Ministry of Trade and Industry. He says that for 40,000 producers in Egypt, there are 112,000 websites that market their products, but that owing to laxity and lack of communication between seller and buyer, these sites are not exploited to their full potential. Mr Omran suggests placing more emphasis on developing the linguistic skills and the marketing culture of the producers, as well as the human resource skills. In addition, he says it is very important to conduct market studies on consumer tastes. Only then, he concludes, can we consider ourselves on the right track to e-commerce.
On another front Sayed Ismaïl, board member of the Industries Union’s Programmes Chamber, called on the authorities to issue a law to manage online trade transactions in Egypt to accommodate the means and limitations of Egyptian companies. He drew attention to a draft law already suggested by a committee formed of various entities involved in the field, including the Central Bank and the Industries Union, and called upon the Central Bank to swiftly enact the regulations for online payment services. He also suggested incentives for companies willing to adopt trade online.
Second in Africa
Haitham Diab, head of an Egyptian trading company, complained that the lack of qualified personnel was among the main problems facing e-commerce in Egypt. There is need, he says, for specialised calibres able and willing to research, gather information on the markets and negotiate through the Internet. Mr Diab points out that the Foreign Trade Training Centre which was established in 2001 by the Ministry of Trade and Industry offers training courses in that domain.
Information provided by the Ministry of Trade and Industry on the Egyptian market, Mr Diab complains, is ancient and insufficient; especially in that e-commerce relies primarily on the market’s prospective inclinations. In order to aid traders, he says, the ministry should provide archival information in addition to accurate market studies on consumer tastes.
Despite the challenges still facing e-trade in Egypt, Mr Diab says, international reports show that Egypt ranks second among African countries in that domain. E-commerce revenues, he divulges, have increased by 10 per cent from 2004 to 2006. In general, he concludes, any development in the information technology field is reflected on the development of e-commerce.
World online
“Online trading is surely among the trends of the current era,” according to Rabeh Basta, professor of economics at Beni Sweif University. Especially, he says, in that it is the most substantial and unprecedented means through which our products can reach world markets. It serves to enable the buyer and producer overcome the distance barrier. Most countries, Egypt included, need to legalise e-commerce within their legislations. Dr Basta advised the relevant authorities to take into consideration taxation agreements between Egypt and various countries while developing the required legislation; in order to avoid duplicate taxation. International cooperation is a must, Dr Basta says, stressing the importance of setting up a single network to link the various authorities and offices to the Finance Ministry. Full coordination between taxation authorities, he says, is imperative to easily exchange information related to online trade transactions.
“E-commerce is still taking its first steps in Egypt,” economics expert Hamdi Abdel-Azim says. We still need to invest more on its infrastructure, and especially on insurance. He advises the facilitation of the procedures related to e-payment, which, he comments, are still sub-par. “There is an increasing need for awareness campaigns of the importance of online trading among traders”, Dr Abdel-Azim says.
“Most Egyptian trade companies view online trading with apprehension, since the activity is relatively new,” comments Khaled al-Sayed, a marketing manager in a company that trades online. For the majority of traders, online does not carry sufficient security or credibility. Multinational companies, he says, are those that benefited most from online trade owing to their means and magnitude.