Offshore easier than home for Algerian ecommerce startup Zawwali

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Algeria’s crusty postal system, lack of addresses and minimal online payment options made international expansion for ecommerce platform Zawwali easier than forging ahead at home.

Brahim Ayaicha, 22, and his friend Raed Layada, 23, had the idea for a local ecommerce platform in 2013.

“It was simple, I wanted to buy stuff on Amazon and I found out they did not deliver in Algeria, so I just thought, what don’t we make our own Amazon?” Ayaicha told Wamda.

They knew nothing about coding - the first step in developing a website - or how to run an ecommerce business, but they did it anyway with a $50,000 loan. This was the easy part, and the website now sees around 30 orders per day and in the past has hit up to 700 orders per day.

The hard work starts

Sourcing products, largely from Turkey and China, was simple, but delivering them was another matter entirely.

They had problems getting products through customs and after that with the rickety postal service. Sometimes it could take three days to get a product from source to customer, other times it might take ten.

“Most of the problems in Algeria are with the customs at the ports. For heavy products for instance, it takes time,” he said. “We often have issues to deliver the product and we can only be paid when the product arrives to the client, with cash or a bank transfer.”

Furthermore, the only way to pay is with cash, check or Mastercard, because Algeria does not have legislation in place yet to allow online payment systems to operate in the country.

The easier option was, unusually, to expand overseas.

“Now, we have orders coming from Egypt, Saudi Arabia, Mauritania and we sub-contract delivery companies there,” Ayaicha said.

Algeria’s ecommerce still left behind

Algeria is ranked 95th in a 2016 UN report which measures the readiness of countries to engage in ecommerce, behind Tunisia which is 73th and Morocco which is ranked 79th.

Whereas Algeria is the fourth richest economy in Africa, weak internet and credit card penetration are two of the many reasons for this delay.

Besides Zawwali, Algerian ecommerce has Jumia Algeria, Nechrifenet and Guiddini, which has been on the market since 2009, and Ouedkniss for classified ads.  There’s Echrily for buying groceries online and electronics seller Tbeznyss, which appeared between 2012 and 2013.

“The culture of ecommerce is already implemented both in the minds of young people, and also for the housewives. For instance, you can see that Facebook groups of people who buy products from abroad and resells them here are working really well,” said Iheb Tekkour, a digital marketing specialist.

“One of the other issues is the lack of data mapping. Sometimes the deliveries never arrive because one can’t find the address, especially outside of Algiers.”

But as ecommerce is not regulated neither is the safety of the products, a Canadian research paper noted in 2015.

No legal framework

A regulatory framework governing the whole ecommerce industry has been an ongoing debate since early 2016.

Tekkour said a decision over legislation was expected in March then it would be up to the SATIM, the Society of Automated Interbank and Electronic Money Transactions which is responsible for developing and managing payment platforms, to roll out payment options to support ecommerce.

Karim Mbarek, the manager of a startup called Xmedia and Event and the organizer of an annual startup summit called Algeria 2.0, said lack of online payment systems was a big hindrance.

“It is very important for Algeria to finally launch a system of online payment because we are left behind and it could be a major step for our economy,” Mbarek said.

So Zawwali cofounders have a lot to wait for besides online payment facilities - better Google Maps being one of them, a legal system being the other.

Feature image via Zawwali.

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