Primed for growth: Digital transformation and a surge in online shopping position the e-commerce segment for future development

Egypt’s young, urban and tech-savvy population and well-connected middle class, combined with rising internet and mobile penetration rates, are driving the expansion of e-commerce. Confidence in the space has grown considerably since the onset of the Covid-19 pandemic, with sector revenue increasing at a rate of around 30% in 2018 and 2019 before escalating to almost 70% in 2020 and over 40% in 2021 as consumers ordered more goods – especially groceries – online and the authorities took steps to support e-retail.

The Egyptian e-commerce landscape is evolving and is set to become more competitive in the coming years. In 2021 more than 20% of tech start-ups were active in the e-commerce and retail tech segments, the highest of any segment and twice as many as financial technology start-ups, which came in second.


With the informal economy accounting for around 40% of GDP – and 85% of informal small and medium-sized enterprises – the government has taken a number of steps to formalise the economy and increase tax revenue. Included in these efforts are the promotion of e-payment and digital transaction solutions for businesses and consumers, such as Meeza – a national e-payment system for domestic transactions launched by the government and the Central Bank of Egypt (CBE) in 2019. The National Telecom Regulatory Authority recorded a 175% year-on-year surge in the use of e-transactions in the first quarter of 2021, after the CBE waived fees and increased limits on e-wallets. Measures to increase financial inclusion and reduce the weight of the informal sector are part of a strategy to transition the country away from a dependence on cash and have driven growth in the e-commerce market.

While consumers were reluctant to use digital channels for shopping pre-2020, the pandemic accelerated digital transformation, with major online retailers such as Souq, which rebranded as Amazon Egypt in 2021, Jumia and Noon reporting a 940% increase in online sales in the first half of the year. According to a 2020 study by Mastercard, almost 75% of consumers said they were shopping online more since the pandemic.

New Players

With the e-commerce sector ripe for further development, more players and platforms are entering the market. In 2021 Egyptian e-commerce start-ups received $131.3m in funding, almost 1.5 times the amount that similar start-ups in Nigeria, Kenya and South Africa received in the same period. The 117 active e-commerce ventures in 2021 comprised 15 multi-product e-commerce stores, similar to Jumia or Amazon; 19 focused on clothes and accessories; 16 specialising in food, drinks and groceries; 46 operating in assorted niches; and 21 active retail tech ventures dedicated to building solutions to assist existing brickand-mortar stores with the digital side of business, such as inventory management and product ordering.

More than 90% of these start-ups operated out of Cairo, including Capiter, a business-to-business marketplace that brings together fast-moving consumer goods (FMCG) producers, wholesalers and merchants on a single platform, which has raised $33m in Series A funding; Wasla, an e-commerce web browser that finds online deals, which has raised $9m; and Cartona, an app that connects retailers and manufacturers, which has received $4.5m in pre-Series A funding.


As consumers ordered more goods online due to public health concerns, food and grocery delivery start-ups emerged to fill the gap in the market. The FMCG and grocery market, worth about $50bn, is highly fragmented, and consumers seek out variety, convenience and price. In 2021 a number of start-ups stepped in to add value to the sector: MaxAB, which manages procurement and grocery delivery to shops around Egypt, raised $40m in Series A financing for expansion; Rabbit, which delivers groceries ordered online in less than 20 minutes, raised $11m in pre-seed funding; and Appetito, Tawfeer Market and ON Market, which deliver groceries on-demand, raised approximately $2.5m, $500,00 and 250,000, respectively.