CEO of the leading e-commerce platform Jumia in Egypt, Hesham Safwat is one of the few pioneers who had the opportunity to witness and build the first wave of organized retail in Egypt,before he ventured into the competitive and growing e-retail space.
Holding a master’s degree in Business Information Technology from Middle sex University and a bachelor’s of engineering from Ain Shams University, Safwat started his career in the retail sector over 15 years ago. In 2001, he was part of the team that launched the electronics retail company Compu Me; he contributed to building the firm’s infrastructure and was in charge of developing both the Internal Merchandising System and External Partners’ Relationships.
By the time he left Compu Me in 2012, the company already had the number one market share of organized retail in Egypt after Carrefour, recording 33 percent. Eager for a new challenge, Safwat moved from offline retailing to the online world;and as chief commercial officer, he lead Rocket Internet’s commercial development in its African venture in Egypt: Jumia.com. He headed a team of entrepreneurs from different nationalities and supported the building of the commercial backbone of the company.
Safwat’s great accomplishments paved his way to become Jumia Egypt’s chief executive officer in late 2014, taking the company to the next level in both market share and brand awareness. He managed to raise more than $320 million in 2016 to support the company’s expansion plans.
To learn more about his journey to success, we spoke to Jumia’s mover and shaker in Egypt. Ina special interview, Safwat explains his vision for promoting local Egyptian brands and improving the Egyptian customers’ perception of online shopping; and highlights how the innovation of Egyptian youth is the backbone of the company’s success. Safwat believes that Jumia serves as democratic e-commerce platform where small,medium and large companies compete together for the benefit of the customers.
What steps did you take early in your career to facilitate the success that later came with Jumia?
After I graduated, I joined Compu Me, which was one of the first few organized retailers locally at the time. The concept was not common in Egypt in the past, as independent retailers and small shops were more dominant. I saw that as an opportunity; I witnessed the revolution of organized retailing as it flourished, along with the rise in shopping malls across Egypt generally and in Cairo and Alexandria particularly.
IT studies were becoming very big, and a lot of institutions were providing facilities and certifications in the field. The computer industry was growing rapidly. Studying engineering in general helps structure your mind in an arranged manner, which is a great foundation for problem solving later.
At Compu Me, the business side attracted me a lot, so I shifted to it from the technical side. As the years went by, I witnessed the market shift with consumers becoming more attuned to a dynamic that relied less on salespeople and more on browsing merchandise; organized retailers facilitated and built this shift. Later, I began working for a regional retail company based in Dubai as a consultant, before I came back in 2013 to join[growing Pan-African marketplace] Jumia.
What does it take for consumers to accept a new product or concept? What did you learn from your experience?
The most important thing I learned is to prioritize what people are actually looking for.
You shouldn’t be restricted in your mindset according to what you think people want; you should not be rigid in your decision-making process. Being flexible helped me a lot, adapted me to different types of sectors, and helped me join certain ones when they were in a very early phase.
For instance, I wouldn’t have joined Compu Me, if I had stuck to traditional thinking, which says it is best to work in the field of your study. Had I ignored the budding technological revolution early in my career and the opportunities it held, I wouldn’t have been standing where I am today.I witnessed how the online arena evolved as consumer patters shifted; people shifted to the online world in search of more independence in their purchasing decisions, given the limitations physical stores may have in terms of merchandise. In terms of offering a better and wider variety of options, the online world has better catered to consumer needs during the past few years.
What personality traits do you feel facilitated your success?
Being humble, receiving feedback positively, and continuously learning…One of the challenges that face marketers in Egypt is that graduates of big universities often have an inflated ego, so even when they join multinationals like Jumia, they do not take feedback favorably. They neither listen nor try to learn much; oftentimes, they are more eager to be involved in the decision-making process rather than absorb lessons and feedback. However, humility and admitting to your weakness is important for one’s professional growth too.
In leading teams, I really focus on people’s empowerment to support them in making their own decisions. I give them room to express their ideas and creativity, and I expose them to all the knowledge they should acquire. Some companies separate each function from the other, whereby everyone is restricted to a certain department and mercial events that didn’t previously exist in the country, like Black Friday. When we launched it in 2014, both vendors and customers made fun of us for trying to localize an international shopping event. Four years later, everyone here is doing Black Friday, and November has effectively become a shopping season.
I believe the Egyptian e-commerce market has massive potential for the next three years.
Do you plan to attract big fast fashion retailers?
There is a concept called the democracy of the e-commerce, whereby a small shop can operate side-by-side of a big brand. We target both small and big brands. As I said before, some brands are not ready to go online, or have their own strategy. But, we have international and local brands. We focus a lot on local brands, and we consider empowering them part of our mission here in Egypt. We launched a campaign at the end of 2016 called “Made in Egypt,” which has lasted through till now.
Not only do we present their products, we also market them because e-commerce is not
only a selling channel but also an awareness channel. I, myself, was surprised by the magnitude of Egyptian made products in the sectors of fashion, FMCGs, groceries, baby and child products, electronics like TVs, and home appliance. An incredible 35 percent of our business is from local products.
Do the prices of some products differ significantly in the online and offline worlds?
Online is usually cheaper than offline because the overheads are much less; that is why we get thousands of sellers on our platform. If they try to expand and open more stores or branches, the costs would be very high.
Are your customers concentrated in main cities like Cairo and Alexandria?
We have customers from as far as Sinai, Matrouh, Aswan, and even Luxor; we cover all of Egypt. E-commerce is penetrating every single governorate in Egypt, particularly in towns where the focused on their KPIs. What I have tried to do is help everyone understand that their KPI is linked to the company’s strategy and orientation, and the effect of what they do on the company’s overall performance.
How do you see your role as the CEO of the biggest e-commerce company in Egypt? And how youcan support SMEs?
We have two value propositions: One focuses on customers, the other focuses on sellers and vendors. We offer the latter a platform that can increase their services and help them scale their businesses across Egypt. The pillar of that platform is small and medium enterprises.
Big companies have a more prominent presence offline, and may not yet be ready to go online or aware of the importance of going online. For SMEs, e-commerce is a breakthrough for their businesses as they get help with selling and advertising their products across Egypt as well as gaining increased visibility.
We found electronics and home appliance brands among the top brands sold by Jumia Egypt despite of their availability offline, why do you think people in Egypt do online shopping?
People can easily compare prices online and get the best deals. In the aftermath of floatation and rise in prices, e-commerce in Egypt thrived remarkably in 2017. The decision to buy a mobile phone or a fridge or a TV has become a bigger investment.
Online is the easiest way to search, as opposed to browsing physical retail outlets. In the online world, there is unlimited assortment and variety.
You can check multiple brands, sizes, and types. Jumia is a marketplace and a platform that combines thousands of sellers competing to sell the same goods.
How you think e-commerce would expand to reach more social segments? How is Jumia working towards that goal?
E-commerce is not just another sales channel separate from offline stores. We target changing people’s purchasing behavior, as they can trust the retailer and place their orders while lying on their bed. We witness this growth every year; it’s always in the three digits. We also created com-availability of physical stores is minimal, the variety is limited, and pricing is very expensive due to lacking competition. E-commerce gave customers in those areas the opportunity to purchase products at the same price levels available in Cairo.
What should a young person in Egypt do to succeed?
They must be bullish enough to explore fields they can pursue, despite what they have studied. Be humble. I worked with foreigners in our team, and I have seen that Egyptians are really humble when they do their work. They accept feedback, learn and listen. Even those in senior positions can admit a mistake in front of their colleagues or team members. Also, young people need to work hard to succeed as opposed to just looking for a salary at the end of the month to purchase what they want. Work with the end goal of a certain position or title. In new fields and sectors, the average age is very young. The priority should be to grow in your career. You could be a CEO by your late 20s or early 30s. People need to work extremely hard to grow fast, rather than get disturbed by issues related to financials and income.
What do you recommend for self-development?
My manager says that big companies now hire people based on skills, not certifications. In the near future, that pattern will become more dominant. Jumia, for example, has employees who were not working in the same field before; and have no particular certifications. Instead, they were hired because they have strong skills that are relevant to this sector. People should focus on improving their skills rather than their certification levels.
How can you judge if someone is flexible and shares the same values as the institution?
For companies in maturity phase, the processes has already been developed by almost 100 percent. Consequently, everything that goes on inside the company has a static process and routine. People end up getting bored because they do everything the same way every day. At startups like Jumia, processes are not yet developed by 100 percent, so flexibility is highly needed as the company may change the strategy every year to adapt and reach the level of growth needed. I judge whether someone is flexible or not by their adaptability.
What do you do in your free time that helps you succeed?
I try to have some time alone. I work out. Anyone who wants to succeed in their life, they have to achieve balance between personal and professional life. In sectors like e-commerce that are highly demanding and stressful requiring 12 to 14 hours of focus daily, it is important to prioritize your personal life in the rest of the day. When I first entered that sector, I encountered that challenge. I dedicated all my time to my career. I couldn’t achieve that balance. Then, I learned how to do it. I think that helped me a lot to succeed.