In this age of the coronavirus pandemic, online shopping is in demand more than ever in many parts of the world. In a few countries, though, buying groceries or other goods over the internet is still something of a rarity.
In Libya, for example, just 22% of the population use the internet and most of them don’t shop online anyway. Just 15% of the adult population and 23% of internet users in Libya bought something online in 2017, according to the most recent figures from the UN’s trade arm UNCTAD.
But with the supply of goods and services more limited than in other, more peaceful countries, there is also clearly an opportunity for anyone that can figure out how to connect with locals online and deliver a wider range of products.
The story behind one local company, Zanomy, illustrates many of the problems facing the country’s online business community as it tries to develop in the face of a debilitating civil war.
Muhanad Saleh, founder and chief executive of Zanomy, packing boxes before sending them on to … [+]
Muhanad Saleh launched the e-commerce site in November 2018 to try and fill some of the gaps in the local market, selling a broad range of consumer goods including electronics, toys and games, clothes, make-up and accessories. He says he came up with the idea for the business while visiting his extended family in Libya, after an absence of several years.
“At first I wanted to open a coffee shop,” he says. “In just 10 days I changed my mind. I noticed that the country had a lot of gaps that need to be filled. Most shops sell products for a very high margin because the competition is too little. The country lacks so many new products.”
Saleh returned to Dubai where he lived and worked as an engineer and spent the next six months developing a website and building up a network of local suppliers. The idea was to place orders with them in Dubai which he would then ship on to his customers in Libya.
But setting up a supplier network has only been half the battle. Dealing with consumers has presented numerous other problems. For one thing, Libya isn’t connected to international banking networks, which rules out the use of the online credit card payments.
To get around that, Zanomy accepts cash on delivery for orders made through the website. For more expensive items it also takes a cash deposit – something which adds time, expense and complexity. “You have to imagine me sending a person to the customer’s house to pick up the prepaid cash and transferring it to me in Dubai so I could confirm the order,” says Saleh.
Libya has been in turmoil since dictator Muammar Gaddafi was overthrown in 2011 and on occasion it has been impossible for Zanomy to reach a customer’s home because of the fighting. “There were times where we call the customer to meet us at a specific area instead of delivering to their home because their address is in a war zone,” says Saleh.
However, dealing in cash exposes a business to heightened currency fluctuation risks, which can eat away at profits. And consumer trust in online businesses is often low.
“Online shopping is still a very new concept in Libya,” adds Saleh. “Matter of fact, a lot of customers used to ask for our shop address and when we say it’s an online shop we lose them right away. People still don’t trust online shopping.”
Some people do have faith in it though. Saleh says his website has sold more than LD2.5 million ($1.8 million) worth of goods to date and staff numbers are now in the low double digits.
Libyan consumers have other options too. Some place orders with Amazon or other major retailers overseas and have the goods shipped to friends or family abroad, who then post them on or bring them in their luggage when they make a trip to Libya.
For those looking for a more formal route, there are services such as Shop&Ship, developed by Dubai-based Aramex. This allows consumers to buy goods from companies around the world and get them delivered to addresses in New York, London, Shanghai, Dubai and other international cities. From there, Shop&Ship forwards them on to Libya (and around 80 other countries). However, a Libyan consumer still needs a payment card which is accepted by the international website or retailer to do this.
There are also apps such as Tedbesha and Spiza which focus on selling local goods. For anyone looking for online food deliveries there are services such as Sofrajee, Wajabat and online cake-maker Rolleta.
There are wider problems for any start-up in Libya. Raising money for a new businesses is hard and internet connections, where they exist, are often unreliable, as are other utilities such as electricity. Zanomy is offering some support for others by working with non-profit organization StartUp Libya and allowing local start-ups to sell their products on its platform commission-free for four months – something which has the added benefit of expanding the range available to its customers without the need to ship more goods from Dubai. Saleh says he is planning to expand the Zanomy website to start offering services too.
It is likely to remain a tough environment to do business in though. “E-commerce is not profitable at the moment but us entrepreneurs have hope in our country. We are hoping that the war will end and the economy will rise back up soon,” says Saleh.
In the meantime, coronavirus is causing some additional problems. Although no confirmed cases have been reported in Libya to date – and there was even a brief truce between the warring parties because of the dangers of an outbreak – the internationally-recognized Government of National Accord (GNA) has imposed a curfew in Tripoli from 6pm to 6am, which is slowing down delivery times, adding yet another hurdle for online businesses.