Since more than a year, Lebanon’s e-commerce sector has been experiencing exponential growth as consumers are increasingly heading towards online payment choices and retailers see the need of having an online presence.

The Covid-19 epidemic had a vital impact on this trend, since it drove individuals to remain at home and purchase their goods online, in which online shopping grew over 400 percent since the beginning of the pandemic. Retailers believe that with the considerably high rate of internet penetration, e-commerce is set to experience ongoing growth in the next five years.

In 2017, “HiCart” launched the first e-commerce platform in Lebanon. George Azar, Founder and CEO of ‘Hicart’ told Sawt Beirut International (SBI) about the role the company has played in creating an electronic shopping culture, as it was the first experience for merchants and consumers at the same time.

Covid’s positive impact

The political situation that the country has experienced since 2019, has impacted the sector negatively, but the pandemic which was accompanied with lockdowns has contributed in the sector’s growth. Electronic stores for shopping has emerged as a solution for merchants and consumers, and demand for online shopping has increased tremendously.

Challenges

Despite the satisfying performance, the economic meltdown has impacted this sector like other economic sectors, as companies and traders suffered from the shortage of goods due to the drop in investments driven by the financial crisis, especially that the investor’s money were trapped in banks and traders were unable to secure the dollar to buy some of the imported goods.

“We are a mirror of the market,” Azar said. But HiCart market was able to overcome the shortages in the supply chain thanks to the 500 merchants who offer their goods in the market.

Sales of luxury goods has dropped as a result of the economic crisis and devaluation, and sales activity focused on selling basic necessities such as household appliances, food, kitchen utensils, and sports equipment. The household electrical appliances sector maintained its performance, according to Azar. The number of orders increased, while the value of orders has dropped.

Some merchants who closed their stores due to the economic crisis in the past two years found the electronic market a haven to market their remaining goods. Many companies have resorted to social media platforms to sell online, and allocated a special team to communicate with customers and answer their questions.

Despite the increase in the number of merchants selling through social media networks, but the opportunities in e-commerce are still promising and the potential for growth is great.

Brain drain

The sector is suffering from the migration of technical labor, especially workers in the technology sector. Additionally, the online platforms are being  paid in Lebanese currency, while some costs are paid in dollars, as the hosting of servers abroad, marketing costs, and delivery are paid in dollars. Companies also deal with workers, developers and marketing experts in dollars.

Double efforts

E-commerce platforms and delivery companies are striving to increase the efficiency of their operations to reduce costs. HiCart has added a new option, whereby the customer can pick up the product he buys himself, therefore he will not pay for the delivery price. Companies are also deliberately developing their services, as HiCart has introduced the possibility of paying in dollars to be calculated on the black-market price for customers who live abroad, but want to purchase online and deliver it to someone within the Lebanese territory. All of this incurs double costs and efforts for companies in order to find solutions to problems related to the e-commerce sector in Lebanon.