Local Brands: From Online to On-site Bazaars

Cairo - 15 January 2024: Even in the age of online shopping, there is still a strong demand for offline retail experiences. Egyptian local brands are, therefore, racing to have their brick-and-mortar shops or join the abundant offline bazaars targeting those still longing for in-store experiences and applying online-to-offline (O2O) commerce strategy.

O2O commerce is a new retail strategy aimed at bringing potential customers from online channels to physical stores to make a purchase. With the   O2O   commerce   market set to hit $422 billion by 2027, small local brands find it a lucrative opportunity to gain ground, directing their online customers to offline locations, such as brick-and-mortar shops, or most commonly, the event venues called bazaars.

While some well-known Egyptian local brands started as online shops on Facebook or Instagram and managed to quickly grow and open their brick-and-mortar shops, others are still in the early stages and cannot afford to open stores due to high operating costs (employees and rent). They tend to participate in events and bazaars to meet their clients’ offline and present their products to a wider range of buyers.

Research shows that 61% of shoppers would rather buy from brands that also have a physical location, as it allows customers to chat with sales representatives, touch products in person, and get the in-store experience.

Meanwhile, as local brands started heading to bazaars to convert e-commerce visitors into offline sales and as an alternative to having brick-and-mortar shops, many startup companies were launched specializing in organizing exhibitions and bazaars, capitalizing on the current traffic.

“We have just launched   our   first   bazaar in June in Sheikh Zayed, targeting small local brands. Bazaars help the local brands see their success in real life, grow and develop their businesses, and gain   more   exposure both on the ground and on social media plat- forms,” said Ahmed Hesham, owner of Eventure Company, to Business Today Egypt (BT).

Hesham added that e-commerce stores that operate online only can join bazaars, giving customers the opportunity to see, touch, and interact with their products, thus boosting their sales, especially during the summer.

A good marketing strategy is the most important factor for the success of any bazaar,” Hesham said, pointing out that most bazaars are held indoors or outdoors in malls, parks, gardens, and clubs in new cities or coastal cities.

He explained that some people mainly prefer bazaars to online stores because they give them the opportunity to see the products in real life. Bazaars also allow customers to take their products home immediately, without having to wait for delivery for days.

“Older generations still prefer offline shop- ping, while the younger generation favors on- line shopping,” he noted.

Despite the growth of online sales, which accounted for nearly 19% of global   retail sales in 2021 and is projected to rise to a quarter in the next five years, offline sales continue to dominate, amounting to 81% of sales ($19.1 trillion), according to Industry Research Website.

For customers, on-site bazaars have a competitive edge over brick-and-mortar stores as well, as they offer a wide range of local startup brands with a variety of prices and products to choose from.

“We mostly depend on bloggers and celebrities to market the bazaar and announce the participating local brands,” said Nagat Tarek, founder of Bazaar Hub, to BT. She added that these influencers typically have a strong presence on specific platforms like Instagram, YouTube, and TikTok, with a massive number of followers exceeding 1 million, often including famous actors, musicians, athletes, and other public figures.

Bazaar Hub, founded by two Egyptian female entrepreneurs a year ago, has organized many bazaars mainly in Sheikh Zayed City and the 6th of October City. They also organize marketing campaigns on social media platforms and entertainment activities during the bazaars to encourage people to visit and increase exposure.

“Based on the total cost of renting the bazaar’s venue and the total marketing budget, we set the cost of exhibitor participation, which should be affordable for the brand to make a reasonable profit,” explained Tarek.

Mai Saad, a 32-year-old owner of a modest clothes brand, shared her experience with bazaars, stating, “My brand started adopting the O2O commerce strategy a year ago and joined an outdoor bazaar last January in one of the well-known malls in the 6th  of  October City, but it  was  not  very  successful  due to the unstable weather, which affected the turnout.”

“However, this will not be our last bazaar, as the participation cost was affordable, and it gave us the exposure and marketing activity we needed. It is not only about direct sales; these can go up or down depending on the bazaar’s location, time, and target audience,” clarified Saad.

Saad highlighted the fact that local brands have been booming for a while and have be- come customers’ first choice, leading brand owners to increase their offline activity and seek more exposure.

“Many customers now prefer local brands to international ones, especially after the flotation of the Egyptian pound, which led to a considerable hike in the prices of imported commodities, and the unavailability of many brands due to the economic crisis that fol- lowed the Russian-Ukrainian war,” Saad concluded.

Since December, the Central Bank of Egypt (CBE), under a loan deal with the IMF, has depreciated the Egyptian pound against   the US dollar by over 100 percent. The US dollar is now traded for over EGP 30.60, compared to EGP 15 before the outbreak of the war in Ukraine.

In brief, bazaars offer retailers the opportunity to bridge the gap between online and offline commerce and help customers access local finds with competitive prices amid challenging economic conditions. They create a complementary shopping experience that keeps customers satisfied and increases profits.