In Egypt’s eCommerce market, two retail models sit side by side.
On the one hand, there are the big players, which provide a reliable service and wide range of products but have limited appeal beyond a small contingent of predominantly urban consumers who are already used to shopping online.
On the other hand, there is a less formalized network of smaller retailers who do business through social media channels. And while these merchants appeal to a broader consumer base, they can be unreliable and difficult to scale.
When the Kenzz eCommerce platform launched in the country earlier this year, it did so with a vision to solve the limitations of the two existing models, the firm’s CEO and co-founder, Ahmed Atef, told PYMNTS.
“We’re building a reliable eCommerce [platform] that is closer to the masses,” he said, explaining that the firm intends to deliver the same reliability of the larger existing players, while “capitalizing on this hype of engagement on social media and social interaction.”
Competing With Big Players
To create an eCommerce experience that delivers the range, attractive prices and reliability of large online retailers, Kenzz sources products directly from suppliers.
As Atef explained, the timing has worked in the company’s favor in this respect as the company has been building business relationships at a time when manufacturers and importers are increasingly riding the wave of Egypt’s digital transformation.
He added that in recent years, factories and supply-side businesses that were built a generation ago have now been passed on to the children of their initial founders, who are more open to the concept of selling online.
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“They see the vision and they know that this is the right time to [adopt] these channels,” he explained, adding that this has helped the Cairo-based firm to secure better trading terms.
With a product offering and price range aiming to compete with the likes of Amazon, Souq and Jumia, Kenzz differentiates itself by targeting the underserved mass market beyond Egypt’s large cities, building out a network of distribution partners that extends across the country.
Atef said that by working closely with partners that have an established presence in their specific localities, Kenzz is able to increase its reach without sacrificing reliability.
“We’re relying on these partners in a hybrid model. We’re not owning […] the last-mile delivery, but we’re owning the quality of it, so we’re just capitalizing on whoever is experienced to do this in these exact cities,” he explained.
Embracing Social Commerce
While Kenzz has looked to emulate the scalability and reliability of the eCommerce business model, it also looks to the organic growth and mass appeal of social commerce.
For example, Atef pointed to the site’s group-buying feature that allows consumers to pool together to purchase bulk quantities of a product and have it delivered to the same address.
In short, when shopping on the Kenzz website, users are shown two different prices; one for purchasing individually and a lower price if they wish to purchase as part of a group. If they decide to purchase with others, they are given a link that they can share via social media to help them gather the necessary collective.
“I’m a believer in capitalizing on social engagement and social media for eCommerce. However, in the past period, there were a lot of [social commerce models] that depend on B2B2C [business-to-business-to-consumer],” Atef said, explaining that existing social commerce models are bogged down with unnecessary middlemen.
As such, Kenzz’s features like group buying are intended to leverage Egyptians’ preference for social commerce while bringing the efficiency of direct-to-consumer sales.
What’s more, because this model encourages people to share savings among friends and family, Atef said that it acts as a form of word-of-mouth marketing.
“Because you know who is the best out of your friends or family that will love this or be attracted to this [product],” he explained, “it’s even better than any performance marketing, which really lowers our cost of [customer] acquisition.”
Another way that Kenzz is tailoring its service to the mass market is by pursuing a payment strategy that starts with cash on delivery.
In fact, many Egyptians put off ordering online because they want to physically view the product before paying for it, a factor that has held back eCommerce penetration, Atef said. As a result, Kenzz is first focusing on cash on delivery, with a plan to introduce digital payment options once the company has gained consumers’ trust.
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