Ibrahim Hamdy, CEO at Arabhardware. Image courtesy of Arabhardware.
Ibrahim Hamdy, chief executive officer (CEO) at Egypt’s biggest IT supplier and first IT Arabic product review lab Arabhardware, spoke to HumanIPO on the Egyptian tech startup scene and other related issues.
HumanIPO: What do you consider your greatest challenge?
Hamdy: E-commerce is still a new concept in this region, the market is not matured enough to deal with online shopping and paying online. It’s a lack of awareness about using IT.
The second barrier in this region is a very high cost of shipping and customs issues for a country like Egypt.
Should the government adopt ICT policies to assist the industry?
Exactly. For example, in a country like Egypt there are still no rules for e-commerce regarding paying online.
Local banks in Egypt take about 3 per cent commission, which is a very high percentage in addition to high setup fees for the online gateway.
Apart from policy changes, what could be done to develop the IT industry further in Egypt?
Firstly to set rules, policies and restrictions, provide easier steps to set up companies with support from the government regarding taxes and investment, create IT zones containing offices with good infrastructures such as high speed internet and provide more IT startup incubators under supervision of professional mentors.
What is your perspective on the technology startup scene in Egypt? Are there a lot of opportunities versus funding?
Startups in Egypt are suffering very much due to the lack of support from government and hard restrictions in setting up the companies with very low variety in venture capital (VC) companies.
Regarding the VCs in Egypt, they are not many and the funds are not that high. They are accepting only traditional ideas in order to avoid risk.That was the main reason to start looking outside Egypt for more investment opportunities interested in our region.
Do you know about local startups which have received external funding from other countries?
I don’t have names… but what’s very popular and always trending in the news are websites like Souq.com, which is part of the Jabbar Group (a Jordanian Company) based in Dubai, [which received] funding from Naspers in South Africa a few months ago.
Some other startups in Egypt received funds from other VCs in Arab countries, such as Jordan and United Arab Emirates (UAE).
How big a role does the online forum still play in the e-commerce business?
As we are the biggest IT community and forum in the Middle East, we keep monitoring the forum to see what people talk about and which products they are interested in and which they are complaining about.
After getting all this information we start to create our decision around which products people are interested in.
Running surveys leads you to always know what people want.
People like this very much as they feel they are in safe hands. If anything happens I can interact directly with the company through Arabhardware.
Sometimes also before getting any new product into our e-commerce, we open a discussion topic in the forum to discuss this product with people and the suitable price for it and why they prefer it.
We review about 20 new products a month. We expanded to mobiles and mobile applications lately.
About 45 per cent of our sales in the e-commerce [industry] is from mobile and tablets.