Egypt’s Voo has rebranded to SideUp. With the assistance of $1.2mn seed funding, the company is expanding to Saudi Arabia, where it will house its headquarters. Some notable investors include Launch Africa VC, 500 Global, Riyadh Angels, Alex Angels, Al Tuwaijri Fund, and Saudi angel investor Faisal Al-Abdulsalam. What’s a little logistics marketplace doing with that much support? SideUp has changed its strategy and will now offer a complete spectrum of e-commerce support services. Think payment gateways, API integration for shipping ,warehousing, fulfillment, advisory, and even small loans. Founder and CEO Waleed Rashed’s mission is clear: he wants to assist SMEs in e-commerce by providing them with much-needed support.
Empowering SMEs with E-Commerce Support
SideUp serves 2,000 e-commerce businesses. Its portfolio has grown 30% month-on-month. It helps micro, small, and medium businesses to sell in over 45 countries. SideUp plans to scale in Egypt and Saudi Arabia, and hopes to add 2 more countries to their expansion plan by the end of 2023.
All of this is timely. We reported before on the growth of e-commerce in the Middle East. To continue that story, check out these statistics:
- Egypt is the 44th largest market for eCommerce worldwide. It contributed to the worldwide growth rate of 18% in 2021, with a projected yearly growth rate of 19% between 2021 and 2025.
- By 2027, the projected market volume of Egypt-based e-commerce will reach US$15.76bn, with 84mn users.
- souq.com leads the pack as Egypt’s top e-commerce store in 2021 with US$82.0mn, followed by amazon.eg with US$31.3mn (souq.com was acquired by amazon in 2017 and is now rebranded as amazon.ae)
- It has the highest internet penetration in the area, driving the adoption of e-commerce.
Saudi Arabia E-Commerce
- Saudi Arabia is the 30th largest market for eCommerce worldwide, with a revenue of US$9.9bn in 2021. It contributed to the worldwide growth rate of 18% in 2021.
- By 2027, the projected market volume of Saudi Arabia e-commerce will reach US$23.46bn, with 28.5mn users.
- haraj.com.sa is the top-performing e-commerce website in Saudi Arabia. Next follow amazon.com and aliexpress.com.
- IstiZada reports that 67% of Saudi Arabian e-commerce shoppers are below 35 years old (as of 2014). The generation is keen to absorb technological developments, and is more likely to shop online with their mobile phones.
The numbers look supportive of SideUp’s endeavors.
Why the Middle East Needs E-Commerce Support
According to Mordor Intelligence, the Middle East has one of the world’s youngest populations. The Middle Eastern shoppers enjoy online shopping with their mobile phones. Widespread mobile usage and enhanced internet access have contributed to the growth of e-commerce in the area.
Nevertheless, only 15% of businesses in the region have online presence, and 67% of the region’s SMEs offer no online sales at all. Rashed commented to TechCrunch+ that “merchants need many services and a complete ecosystem to be successful,” which is difficult for micro, small, and medium businesses.
Sami Mahroum, professor at the Solvay Brussels School of Economics and Management, states that “part of the solution (to improving e-commerce in the Arab world) is to address the infrastructure constraints facing small businesses in the region.” Egyptians and Arabians are credit-shy, leading to a payment scheme that’s heavily driven by cash-on-delivery. By offering more diverse payment terms through e-commerce support, firms like SideUp will make a splash.
Help for the Little Guys
In April 2020, Mastercard pledged US$250mn to help micro and small businesses in finance, technology, and product and services support until 2025. Of those, around 10 million businesses were in MEA. Mastercard encourages partnerships with key stakeholders like governments, mobile network operators, payment service providers, financial institutions, and social enterprises to enable greater financial inclusion. In any case, it looks like the region is observing a decline in cash transactions, fueled especially by the pandemic. 24% of consumers have used a buy now, pay later option – which is more than in the European market.
It looks like the region is growing, changing, and evolving at breakneck speed. Since seed funding is being channeled to players like SideUp, we can expect a lot of support for the MEA region. It’s definitely a region to keep an eye on; all the infrastructure is coming up to encourage massive growth in Saudi Arabia and Egypt e-commerce. Everyone from the larger players selling on Amazon to the micro businesses receiving infrastructure assistance have a very bright future to look forward to.
Do you think MEA is a strong e-commerce market? Do you think it’s wise to diversify to Egypt or Saudi Arabia? Share your thoughts!