Souq in Egypt: Not Relinquishing its Crown Anytime Soon
I visited the new challenger recently, so it was only fair I also visit the undisputed champion. The two companies I’m talking about are Jumia and Souq.com respectively. Souq’s been the number one online marketplace in Egypt for a number of years and I was keen to see how they planned to stay number one, especially in light of this new competition.
“You know Souq started as an eBay-style auction website,” started Omar Sodoudi, Souq’s general manager in Egypt,”but we soon went to the ‘buy now’ market-place model, because we’ve always only been interested in delivering what the customer wants, and auctions are just not part of the local mindset yet.” This was souq’s first pivot (fundamental change of direction), and shows that flexibility has been a cornerstone of the business.
Souq also pioneered when it came to bringing Egyptian brands online. “For the 2010 Africa Cup of Nations we thought it made sense to sell the Egyptian national football team’s shirt, but Puma (the team’s sponsor at the time) wasn’t convinced of the online opportunity," Sodoudi recalls. "So we listed the shirts anyway, and bought them from Puma as orders came in. We edited together a daily goal-highlights video as a promotional tool, which got around 120,000 viewers in 30 days. We ended up selling more national team shirts in that period than all the Puma stores in Egypt combined. Puma didn’t ignore us again. Two years ago we had to work hard to convince brands to open a store on Souq and digitize their content, now they’re calling us to be included in our market place."
“However, the bedrock of Souq’s growth has been the entrepreneurs that have stores on our market-place. We have our own business development team, but with the entrepreneurs we have hundreds of business developers, providing 100s of brands and many verticals,” Omar continued. “We’ve developed long-term solid relationships with our sellers, we’re partners, we support them, advise them, and help them grow.” What about poor sellers? Of course there’s the rating system to warn customers, but Omar told me that Souq also actively quality controls items listed,” we remove items if they consistently get bad ratings. In general regarding sellers, the bad tend to disappear, Souq helps the good grow.”
And grow they have. “We’re number one in Egypt, we’re in the top 40 most visited sites in Egypt with 7m monthly visitors, and we have 370,000 fans on facebook. We’ve consistently grown by 15 to 30% every month, and the demographic of our sellers is changing too; 2 years ago 50% were in their early twenties, now it’s closer to 30%,” he clarified. His financial background was clear throughout our discussion, plucking numbers and statistics from his memory effortlessly. But numbers alone don’t make a business tick.
“Our staff are great, and highly motivated' they’re allowed to grow with the company and try new things, and because of this they’re willing to go above and beyond. Nearly half our new employees come through the NGO Education for Employment, who do a great job of training those new recruits with Souq-specific training,” Sodoudi explained. In other words, employees are prepared from day one on the job, and are encouraged to be intrepreneurs, so Souq is all about an entrepreneurial mindset.
“In the past year we have witnessed expansions & investments both by local and international investors in the Egyptian e-commerce sector, which is a testament to the opportunities that lies ahead. We are positioned well in Egypt," he says. "In March, we started selling our own products for next day delivery. We’re now an e-retailer, so on top of our market place, we’re also an online mall with our own stock and full supply-chain capability. We list properties and automobiles, include new consumer goods' verticals regularly, and continue to increase our geographic reach. We added the Fawry payment method recently, and we’re trialing Mashaweer for same-day delivery as we speak! Not forgetting our 'Deal of The Day' offers for even more value, we’re always innovating.”
A testament to their innovation, Souq Egypt because the first Egyptian company to win the ‘Best Interactive Facebook Application for Retail’ Award in the MENA region at the recent Pan Arab Web Awards. “I’m very proud of the team for this, and pleasantly surprised as I had no idea we’d been entered, let alone that we’d won when the organisers contacted us,” Omar admitted.
So what about the new competition, especially after Jumia's recent large second round of funding? “To be honest, we’re always a little paranoid anyway. Whenever we achieve something good we enjoy it, and then think how we could improve it. We already know we can’t rest on our laurels.” In other words, Omar and his team aren’t worried about Jumia, they’re their own biggest motivators. That’s the kind of mindset that keeps a champion on top, even against a substantial contender.
So the near future promises to be a time of great value for the Egyptian online consumer; and a time of great insight for budding Egyptian entrepreneurs.