Herzone, a website specialised in e-commerce for women’s products, plans to expand its operations by entering the Saudi market next year. The company also plans to expand its operations by launching in Middle Eastern and North African markets, as well as that of the United States of America.
Diaa Hassan, chairperson of the company’s board of directors, said during an interview with Daily News Egypt that the company also aims to increase the number of exhibitors and shops to 200. Hassan pointed out that the company is also working to negotiate with a venture capital fund to obtain an investment in order to finance the company’s expansion.
Your site is primarily geared to women. Why is that?
Our website is primarily geared to providing women’s needs through the internet, but there are some products for men.
Statistics show that in Cairo alone, 5.8 million women use the internet and social network platforms. This indicates a strong presence of women on the internet, and this creates an investment opportunity in the market.
What are the main challenges facing you in Egypt?
The weakness of internet speeds in some areas makes the online shopping experience difficult for many customers, which is a major challenge in the growth of the electronic commerce industry. In addition, there is a proliferation of the parallel market for electronic commerce through Facebook pages or unsafe electronic commerce sites, which causes clients to have bad experiences that make them reluctant to use e-commerce again.
How can a consumer differentiate a safe website from one that isn’t?
This is easily seen through the URL. A safe site will have a URL starting with HTTPS, which indicates that the website is safe to visit. This is present in many e-commerce websites in Egypt.
What are the most prominent products offered through your site?
We have many products, such as electrical appliances, clothing, bags, shoes, and healthcare products for women, accessories, and mobile phones. We have 50 exhibitors on the Herzone platform now, and we plan to increase the number to 200 by the end of the year.
What is the basis on which products are selected?
We have two types of products, one of which belongs to well-known brands, while the second type includes those of small enterprises and workshops. The first type is supported by the company’s guarantee and trademarks. The other type, we test and make sure the exhibitor owns a commercial record and a tax card for the product.
In addition, the purchase process is made online, but the payment process is made after the receipt of the product (cash on delivery). This enables clients to check the product when it arrives before paying for it. We ensure all legal rights to our clients, and they can return or replace the products within 14 days of purchase.
How many visits does your website get now?
The website is quite young, yet we have been seeing 120,000 visits per month. Purchases made reached 3,000 transactions in March during Mother’s Day. Average monthly purchases range around 1,000 transactions. We aim to boost the purchases to 3,000 per month by the end of the year. It’s worth noting that, based on our indicators, about 27% of visitors who used the website have used it again.
How many logistics centres do you have?
Currently, we have two centres, one in 6th of October City and the other in Moqattam. Through the centres, the products are divided and packaged according to the destination to be delivered.
What is the geographical distribution of your customers?
At the beginning of our work, we expected to have the bulk of our users located in high-end areas where women use Facebook and the internet intensely. But, after a few months in, we found out that the opposite is true, where most of our clients are located in low-class areas.
Cairo has the largest share of our sales, but we sell very well in Alexandria, Suez, the Nile Delta, and Upper Egypt.
Currently, we deliver the products by ourselves through our fleet, as well as two contracted shipping companies. The shipping time does not exceed 72 hours now, but we aim to bring it down to 48 hours at most.
Do you have plans to launch an application for the site?
The application for the site has already been created and is expected to be launched over the next few days with huge discounts to encourage customers to use the application. It will be available on devices operating iOS and Android.
For the electronic commerce system, what is missing?
The system needs to be further regulated. It is necessary to eliminate the parallel market for electronic commerce, as it damages the market and gives customers a bad experience.
Moreover, there are not enough financiers to fund existing projects. For example, banks do not finance such projects, which is a major obstacle. Existing business incubators are also suitable for the conversion of ideas into projects. Financial institutions that help existing enterprises to grow more efficiently are very few.
How do we overcome this problem?
The Ministry of Communication and Information Technology needs to establish a financing body for investment and financing projects for the sector.
Are there negotiations to receive investments from investment funds?
We are already in preliminary negotiations with one of the venture capital funds in the United States. There were simple talks about the website’s specific details.
Are there negative effects of the decline in purchasing power of the Egyptian consumer?
Indeed, the past period witnessed a decline in the purchasing power of many Egyptian consumers. However, the measures that have been taken will help improve the situation in the coming period. The Egyptian market has more than 90 million consumers, of which 50% use smartphones. The market can absorb many players in the e-commerce market because it is a virgin market.
Egypt’s e-commerce market is also a good growth opportunity when compared to other markets. For example, in England the number of online buyers is three times larger than the number of traditional shoppers. In the United States last year, during Black Friday, there were 10 million online purchases—more than were done in shops.
What are your plans for expansion during the coming period?
We plan to expand into the Saudi market in 2018 and head to the US market in the coming period. We also plan to operate in North Africa and the Arab world.
What distinguishes you from your competitors?
We are distinguished by providing sophisticated customer service throughout the day, and we have more than 500 exclusive products. This happened even though we just launched six months ago.
What are your plans for the Egyptian market?
We aim to denominate a large market share before the end of the year, but we find it difficult to announce that share now. We also plan to reach 100 sales per day by the end of the year and 1,000 sales per day by the end of the coming year.