Egypt’s smartphone market has taken a significant hit due to supply chains affected by the coronavirus (COVID-19) pandemic.
The supply chain hiccups can be traced back to Chinese factories which temporarily halted work due to the pandemic, causing production levels to fall. This, in turn, put a stop to shipments worldwide. Although factories since returned to work, shipments of smartphones from China have still faced difficulties.
Ahmed Abu Ouf, head of the Etisal Trading which serves as the local agent for Chinese company, HONOR,, said customer demand has not been affected by the ongoing pandemic. There is simply a demand for smartphones, especially as consumers are currently more likely to be home, increasing the need for technologies at home, which could potentially be unmet by supply.
Abu Ouf added that the challenge facing the mobile market comes from the logistical supply chain, as shipping costs rose due to the decreased numbers of products coming from China. He said that the high cost is borne by the agent or the brand itself, and cannot be passed down to the consumer under the current circumstances.
Abu Ouf said that the quantity of phones available on the market is roughly 20% less than in pre-coronavirus times. This could have a knock-on effect in the second half (H2) of Ramadan, which is one of the most important times for phone sales in Egypt.
A mobile dealer, who wished to remain anonymous, said that companies face the challenge of the high costs providing their products in the Egyptian market. He attributed this to the logistics of getting the products to sellers, who must maintain the numbers of phones available on the market at the same prices due to fierce competition.
The seller added that many companies are reducing their marketing budgets and stopping outdoor and television advertising campaigns. They are, instead, directing the budget to maintain product prices for consumers.
Strategy Analytics, which specialises in analyzing market data, has revealed a significant decrease in smartphone sales around the world during February due to the coronavirus pandemic. The company pointed to a large number of countries who have decided to stop imports and impose curfews.
In a study conducted by the company, smartphone sales decreased 38% in February 2020, compared to the same month in 2019. The study also indicated that there were 99.2 million phone sales in February 2019 , compared to 61.8 million in February 2020.
This marks the largest decline in smartphone sales for many years, with the projected sales figures for March declining in alarming numbers due to the continued global pandemic.