Egypt's Two Paths to Consumer Goods

Egypt's market is quite similar to the Italian one. Consumers are changing their shopping behaviour, facing a devaluation in local currency while Italians are dealing with ongoing inflation. On the other hand, in order to control rising prices and protect consumers' purchasing power, Egyptian companies are now more focused on improving industrial productivity and efficiency. In this context, new technologies are becoming more and more important in a market where consumption trends are growing anyway, due to the continuous increase of the Egyptian population (now around 109 million people). So, today could be approached as a new step in the country's development because "local Egyptian manufacturers have proven their ability to produce products having the same quality as any other imported product in the FMCG (Fast-Moving Consumer Goods, editor's note) industry", says Moustafa Hassanein, Deputy General Manager at Maggie Metal Corporation, a family company that acts as local representative for companies from around the world (mostly Italian brands) which mainly but not exclusively operate in the Food & Beverage industry.

By buying local raw materials (to cushion the spread between the American dollar USD and the Egyptian pound EGP) and thanks to lower manufacturing costs, companies can reduce total charges and support more investment and knowledge in new skills among young workers. The purpose is to boost an existing and increasing consumer inclination for local brands which means, in turn, a more evolved and prouder consumer. In confirmation, there is in Egypt a relevant target of consumers who are aware of what they buy; they choose high-quality products and continue to choose high-quality products, even if they reduce the volumes purchased, due to increasing prices.

"I see two main opportunities in the Egyptian FMCG market today: the first one is the export of local products like agricultural goods, the second is local manufacturing activities of FMCG items which are currently mainly imported into the Egyptian market at high prices. In this last case, the opportunity is linked to the market's recent trend of consuming and preferring local products", highlights Hassanein, who did his MBA at SDA Bocconi School of Management. "In the end, following Egypt's recovery from the current economic hiccup, caused by the temporary instability of the conversion rate of the EGP in comparison to the USD, the consumption of FMCG products is bound to grow as it did in the past".

Also, the role of new technologies allows to look a bit further, in two different directions, horizontally beyond Egyptian borders towards other markets in the same geographical region and, vertically, towards small businesses. "Cross-border trade and commercial co-operation has never been easier. Companies from all industries are becoming more aware and more dependent on technology in their activities", concludes Hassanein who has also witnessed "the importance of doing business via mobile phone for small firms, especially local ones, across many industries, helping them bootstrap start-ups or significantly grow sales in both local and international markets".