Entrepreneurship Zone: 22 May 2023 :: Egypt: Inventory management goes digital for Cairo’s corner stores

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Entrepreneurship Zone: 22 May 2023 ::  Egypt: Inventory management goes
digital for Cairo’s corner stores

 




 


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An online platform is transforming the way small businesses and corner
stores in Cairo resupply inventory, winning loyal customers in some of
Egypt’s most underserved neighbourhoods. The company behind the service is
equipping its retail partners with new skills, tools, and opportunities to
grow.

With an upward push of a clattering steel shutter, Abeer Zainhom sends
morning light flooding into the corner store she has run for the past 30
years.

Tidy rows of candies, sodas, and snacks line this narrow storefront, around
which Cairo is already wide awake. At eight o’clock in the morning, the
honking from taxis, tuk-tuks, and buses on this street already dissolves
into a single, discordant roar.

“It’s like this every day,” says the 50-year-old mother of two, gesturing
to the tide of pedestrians and street vendors surging outside her window.
“It’s just life here.”

Despite the bustling street scene, however, Zainhom and many others in this
megacity of 20 million are facing dire times. Skyrocketing food prices are
squeezing household incomes in an economy that was already strained.

“There was a time recently where I was selling eggs at a few [Egyptian]
pounds apiece, only to turn around and see the wholesale price had doubled
overnight,” she says.

Business has gotten easier in one crucial way over the last few years,
however.

Three years ago, Zainhom began working with a local startup that is
simplifying the way she and thousands of small-scale shopkeepers across
Cairo source their goods.

Known as MaxAB – a play on the word for ‘gain’ in Arabic – the locally
developed e-commerce platform delivers supplies directly to even the
smallest of corner stores, saving shopkeepers like Zainhom lengthy trips,
often on foot, to distant wholesalers.

Two years after its founding in 2018, MaxAB received a $4 million
investment from IFC to help scale its business and provide pathways to boost
women’s entrepreneurship. The financing, which was made in partnership with
the Women Entrepreneurs Finance Initiative (We-Fi), has helped MaxAB build a
customer base of over 50,000 retailers across Egypt and Morocco.



Shopkeeper Abeer Zainhom outside her store in downtown Cairo. Photo by Noah
Blaser / IFC.

 

Recent interviews suggest that MaxAB has indeed made real and swift
improvements to the lives of shopkeepers who use its services. They also
suggest that MaxAB has built up a level of trust with its risk-averse
customers – one that will allow it to serve as a trusted outlet for skills
and business training, as well as for shop insurance and loans.

The context is in the chaos. Cairo ranks as one of the most congested
cities in the world and suffers from high concentrations of PM2.5 – small
airborne pollutants that can permanently damage the lungs.

The World Bank estimates that nearly 12% of all deaths in Cairo in 2017
were caused by exposure to PM2.5. In 2020, the World Bank announced a $200
million loan for helping Egypt reduce unregulated vehicle emissions and
other sources of urban pollution.

Zainhom and her 21-year-old son once laboured through the worst of that
pollution, making regular trips to distant warehouses to restock their shop.
She expands her arms, showing the burden of grocery bags that each of her
hauls would entail.

These days, Zainhom uses the MaxAB smartphone app to order the same goods
at a similar cost, minus the lost business from closing her store to
resupply. Within a business day, a three-wheeled motorbike trundles past her
shop and delivers the goods she’s ordered. “MaxAB made life much, much
easier,” she says.

MaxAB has achieved that convenience through a deliberate effort to work
with, rather than around, Egypt’s uncounted numbers of largely informal,
cash-only retailers.

Joining IFC on a tour of his clients, MaxAB’s head of market intelligence
Ahmed Naguib nods approvingly at Zainhom’s shop. “This is our kind of
place,” he says, explaining that the company did the opposite of its
competitors, which remain focused on deliveries to larger clients.

“Our business model has always been about reaching the unreachable,” he
says. “Once you can do that, you can do anything.”

In recent years, MaxAB’s dramatic scaleup has meant success, but also
challenges. Naguib says the company has worked to find the right mix of
ownership and leasing arrangements for its distribution centres, all while
debuting its services in Morocco and rolling out shop insurance plans and
loan services.

“For MaxAB, we see our people as our biggest investment,” said Naguib. “We
don’t simply want to expand our client base. We want the entrepreneurs we’re
working with today to become retail leaders tomorrow.”


Life behind the counter: Portraits of Cairo’s shopkeepers


Squeaking by in Shubra: Zinab’s search for new opportunities



Shopkeeper Zinab Mahmoud. Photo by Noah Blaser / IFC

 

It’s midday in Shubra, the largest Coptic Christian district in Cairo.
Brightly painted religious icons dangle on a wire over a busy thoroughfare
of cafes, workshops, and steel doors adorned with crosses.

Shubra means ‘village’ in Coptic, and for 31-year-old shopkeeper Zinab
Mahmoud, it’s her close neighbours that make this street feel like one.

“My family has been right here since the early 90s,” she says, standing in
front of a narrow storefront of potato chips, cooking oil, and toiletries.
“Being connected to people of all kinds – people I’ve known my whole life –
is what keeps me here.”

The other reason is more pragmatic. Mahmoud is the family’s single
breadwinner, looking after three children between the ages of one and five.
With her home just upstairs, shopkeeping allows her to tend to family as
well as its income.

“Every day it feels like you start over, it’s the same set of duties, and
always a new challenge here and there,” says Mahmoud. “It’s a lot of weight
to carry on your own.”

Three years ago, Mahmoud started using MaxAB to help replenish the store’s
inventory. Restocking once meant a long walk to multiple wholesalers, and
she remembers “carrying everything back by hand, really it was such an
exhausting struggle.”

As if to confirm those difficulties, a hulking truck squeezes past her
storefront, honking and pushing pedestrians into neighboring shops. “Not
needing to be out in this has made a difference,” she says.

With an undergraduate degree in literature and philosophy, Mahmoud once had
ambitions for a more white-collar career. These days, Mahmoud instead
focuses on her store, and doing her entrepreneurial best to run it.

Out front, children look into the frosty glass of a newly purchased ice
cream machine. Behind the counter, she recently started offering digital
payments at her shop – a service that allows unbanked customers to pay bills
for a small fee. The extra income has allowed her to hire her first
employee.

Still, she hungers to get ahead, especially as inflation eats into her
profits. “Sales skills, accounting, I’d love to have any kind of education
that could help me think about how to expand, how to plan out seasonal
items, such as back-to-school supplies.”

For now, Mahmoud remains somewhat sceptical of outside help. “It’s not at
all common to have women shopkeepers around here, and people think they can
pull one over on me because I’m a woman,” adding with a wry smile, “but I’m
tough, I have to be.”

“Banks and financial institutions have come around my shop … they ask if I
need financial assistance,” she says. “I don’t feel I can trust people like
this.” Nevertheless, Mahmoud suggests that MaxAB might be an exception.
Asked if a skills programme offered by the company would appeal, she replies
that it would.

“I’d still like help getting skills – any kind of advice that could help me
increase my business.”

‘You’re never too old to learn’: Omar’s hypermarket hopes



Shopkeeper Omar Gaber. Photo by Noah Blaser / IFC.

 

Just a few blocks from the eastern bank of the Nile, the silhouettes of
riverside hotels give way to a leafy neighbourhood of low buildings with
faded historic facades.

Manning a storefront wedged between two apartment buildings, Omar Gaber
says he was an early convert to MaxAB.

“What do I sell? I sell whatever MaxAB supplies,” the 28-year-old says.
“The deliveries are fast and dependable. This is what makes it stand out.”

Before opening this shop three years ago, Gaber worked part time at another
corner store. He found himself travelling to distant warehouses to maintain
a steady supply of candies, gums, tea biscuits, and other items.

“The wholesalers would give me different prices for the same goods,” he
says. “It was such a confusing process.”

These days, life is significantly easier. Relying on MaxAB for deliveries,
he can also call on relatives to help him keep his shop open from morning to
well past midnight. A father of two, his wife takes the lead on
child-rearing duties.

Despite the extreme upward pressures of inflation, “business is normal,” he
said, “And this is a street where people know each other, and we deal with
all of our neighbours easily.”

Gaber dreams of doing more, however. A university graduate with a degree in
information systems, he hopes to expand his business.

“I found myself here after my studies,” he says. “So, I do dream of growing
this business. I dream of having a hypermarket,” he adds, pantomiming the
swoosh of an automatic glass doorway, the hum of a row of refrigerators.

Paying for his MaxAB deliveries in cash, Gaber insists that loans or
creative finance options are out of the question for making that expansion
happen. His faith would prohibit him from taking a loan, even if a modest
one was available. The suggestion of training and skills, on the other hand,
makes Gaber light up.

“You’re never too old to learn,” he said. “Business administration and
commerce – these are things I’d like to know. Unless I keep learning I’ll
never be able to realise my dreams.”

‘It saves my time, it saves my health’: Hind places trust and training
hopes in MaxAB



Shopkeeper Hind Mahmoud. Photo by Noah Blaser / IFC.

 

With spiralling minaret and ornamental motifs, the Ibn Tulun Mosque has
long been one of Cairo’s most famous tourist attractions.

But just two streets beyond its ninth century gates, the corner store of
Hind Mahmoud is in a world of its own. On a recent morning, the 40-year-old
shopkeeper sat waiting for business, the occasional passersby offering
morning greetings as she swept the floor of her narrow store.

“You look at this street and you see peace,” she said, motioning to the
sleepy alley where she has done business for the past eight years. “But
inflation has really hit us, and this lack of business is a big problem.”

A university graduate who speaks in confident English, Hind Mahmoud found
herself tending shop after her dream of becoming a language teacher
faltered.

Hind is eager to improve her business and her fortunes. With snacks,
candies, and dry goods currently on offer, she hopes to buy a cooler to sell
cold drinks, as well as an ice cream freezer to cater to neighbourhood’s
youngest.

Currently, however, she struggles just to keep up with soaring rents and
provide for her three children, aged 16, 15, and 11.

“How do I balance work and kids? I can’t. And yet, somehow, I do. I cook
and clean, I tutor the children, especially with English, and all the while
I need to work,” she said.

Hind has been using MaxAB for the last three years, and says her overall
experience has been positive. “It saves my time, it saves my health.”

That praise is no small thing, given Hind’s distrust of other companies
offering services to her shop. “So many companies and lenders come by, they
offer money, and talk about being ‘partners,’ but it all means becoming
indebted to others,” she says.

Like many of the other shopkeepers that use MaxAB, Hind pays in cash upon
delivery. She does not have a bank account. Hind agrees that courses in
financial literacy or simple shop management might help her improve her
business situation.

“I’m an educated person, I know the value to learning and I’m always eager
to learn more.” She adds, however, that education would need to work around
her schedule.

When a MaxAB representative arrives, Hind engages in friendly conversation.
If MaxAB were to offer the kind of courses she’s looking for, she says she’s
grown to trust the company to put her usual reservations aside. “My
experience so far has been good,” she said. “I’d definitely be interested in
trying something, including courses from them.”



A busy commercial street in downtown Cairo. Photo by Hamada Elrasam.

This article was first published by the IFC.

- Howwemadeitinafrica

 

 


 


 


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