By: Omnia Ahmed
Mubasher: Tech-based startups focusing on fintech, gaming, virtual reality (VR), and artificial intelligence (AI) have been successfully emerging in the MENA region over the years. Among those enterprises is Taager which chose social e-commerce to build its own business.
According to the latest data, the e-commerce market in the MENA region is projected to reach $57 billion in 2026. In an interview with Mubasher under the Startup Lounge series, Mohammed Elhorishy, Founder and CEO of Taager, recalled his personal experience about developing the social e-commerce platform and unveiled plans to scale up the business in six countries across the Middle East and Africa (MEA).
Elhorishy addressed the current inflation crisis and its effect on Taager, giving his opinion on whether to make the US dollar the main currency in online transactions amid the devaluation of the Egyptian pound.
Could you share with our readers why you chose e-commerce, in specific, to build your own startup?
Your question itself confirms just how successful tech-based startups have been over the years in the MENA region, indeed there is real evidence of explosive growth over the past few years, and this trend is expected to continue. Even though social e-commerce is a fairly young industry, it is growing rapidly.
The most recent figures by data provider Statista suggest the UAE has a social media penetration of 105.50% – the highest in the world – while Saudi Arabia is home to 29.10 million social media users, or ca. 80% of the population. As people spend more and more time on social media and the platforms have matured to achieve monetisation, their shopping habits are already changing.
On a personal level, my brother was a seller on social media, so I got to see his pain points first-hand – from difficulties selecting and sourcing products to storing them in our house and having no financing options. When I understood there were hundreds of thousands of sellers just like him operating in a vacuum, this was the light-bulb moment that ultimately led to Taager.
COVID-19 followed the establishment of Taager. Did that boost the app’s expansion, especially since people preferred online transactions during the pandemic?
It was not really COVID-19 but the response of governments to the pandemic that helped boost e-commerce and other digital business models globally. The introduction of travel restrictions and limits on social gatherings or simply going to the shops all drove people towards online shopping and communication.
Indeed, it has been said that without the internet, the restrictions would not have been possible as there would have been no alternative but to continue going out. The result was universal around the world, with online shopping and deliveries mushrooming and new ways of purchasing– such as the social e-commerce Taager enables – increasingly attracting customers.
An interesting effect of the pandemic-induced embrace of digital solutions was age-agnostic (as opposed to its usual skewing towards younger users) and also included an older demographic than we had seen before.
Not only did we benefit from the accelerated embrace of e-commerce, but we also provided people with a means to continue earning a living during incredibly uncertain times. As small sellers were struggling to shift their businesses to online channels, we gave them a ready-made solution. This accelerated the adoption of our platform.
How did the current inflation crisis worldwide affect your business, and did it cause uncertainty in Taager operations?
In times when price inflation is growing quickly, people become incredibly price-conscious and are more inclined to seek out deals – something that we see as an opportunity rather than a threat.
Our scale enables us to select and source products, in addition to providing best-in-class logistics solutions at much better prices than small retailers online would be able to manage themselves. In a time when small online and offline sellers would ordinarily see their margins shrink, using our platform enables them to double their profits.
Would you consider making the USD the main currency used in online transactions? And why?
As Taager acts as end-to-end for SMEs and social sellers across MENA – offering optimised product selection and sourcing, logistics, financing, etc. –, we transact in different national currencies. Which currency depends on our customers, and since we are focused on enabling anyone to sell on social media, we tend to be very forthcoming and accommodating.
MENA is a market with many currencies, and it is true cross-border transactions and currency exchange are not yet as frictionless as in, say, Western Europe or the Americas. However, we are not considering switching to US Dollars-only transactions, as this goes against Taager’s spirit of being a solution custom-built for our region.
Taager is considered to be the first-of-its-kind social e-commerce platform. How far was it challenging to introduce this idea in the MENA region?
Introducing new concepts and new products is always a challenge but we knew our region and understood how curious and sociable MENA consumers are – they love bargain-hunting and they like to do it in a social setting. We never doubted our target market had incredible potential. Taager provided an answer to many problems faced by sellers on social media. Our comprehensive approach to provide the back-end of social e-commerce makes it easy for anyone to start and scale a social media e-commerce business, regardless of their prior knowledge or experience. We found we were pushing at lots of doors that were already half-open.
Besides Egypt, KSA, and the UAE, do you plan to enter new markets and run the business on a global scale?
One of the beautiful advantages of scaling a solution like ours is that it is very easy to adapt to different national markets – making international expansion more attractive. So, yes, we are looking continuously for new expansion opportunities and plan to enter several new markets in the course of 2023. Some of the most attractive markets are Kuwait, Oman, Qatar, and Bahrain in the Middle East and Morocco and Kenya in Africa.
As social media algorithms become more sophisticated, sellers in different or multiple locations are able to tailor products to be more relevant to varying tastes and interests. Each market has its own unique nuances, requirements, and considerations, but uniting them is a growing demand being made of e-commerce offerings by social media users. This better satisfies shopper needs, while driving business growth – but also makes opening a service in a new market much easier and quicker.
Do you have the same strategy or criteria in each country where Taager operates? Or do you take a different path in accordance with the different needs of the markets?
Taager was built around the hyper-flexibility of social media commerce. In fact, it is one of our core abilities to reflect the positive disparities between different countries, adapt our products, and help sellers achieve top-level sales. It would be a missed opportunity were we not continuously seeking to maximise the potential by being nuanced and different where it matters.
This is where our proprietary and unique database – by far the largest and most sophisticated for MENA’s social e-commerce ecosystem –makes a huge difference by helping us identify what customers want. We offer our sellers different arrays along which they can diversify and differentiate their selling tactics – one of which is the difference between countries.
Are you planning the next funding round for Taager?
The timing of funding rounds is always an important consideration and our seed fundraise allowed us to turbocharge our rapid growth from 5,000 sellers in 2021 to having served over 40,000 sellers to date. With the funding, and maintaining a strong focus on unit economics, Taager is on a clear, accelerated path to profitability. Proceeds were used to hire new talent and leadership, and scale operations from our founding market of Egypt across the region into the UAE, and KSA – where our regional HQ is based. Our HQ in Cairo continues to provide strategic planning and leadership to drive our regional expansion across Africa.
Further funding rounds certainly are on the horizon but that is all we can disclose at this point. We are naturally grateful for all our investor support and look forward to continue working with them as our rapid growth and expansion across the Middle East and Africa continues.
Which is the most flourishing market so far among Egypt, KSA, and the UAE? And why?
The acceptance of social media and social e-commerce across MENA is astonishing. Taager’s solution is, in a sense, genuinely built for the Middle East’s culture – which has a very interactive style of trading, buying, selling, and negotiating, and today is deeply enamoured with the constant interaction that is social media.
The KSA is the most exciting growth market for our sellers from an end-customer perspective – Saudi citizens love to shop via social media and purchase across the spectrum of goods, from home gadgets to luxury brands. Since November 2022, we have almost doubled the number of sellers working on the Saudi market – a momentum that we expect to continue.
To what extent do you believe Taager contributes to bolstering job creation and employment amid economic difficulties?
Our mission is to provide the people in the MENA region with a means to earn a living which is extremely relevant in the current economic times. The argument for social e-commerce as a creator of jobs is very straightforward – literally everyone can become a seller-entrepreneur with his or her own e-shop across different social media platforms, supported by Taager’s solutions.
We enable people to start an e-commerce business with no upfront capital which has traditionally been a significant barrier to entry. We are driven by the success stories on our platform – sellers with no prior experience have been able to utilise Taager to provide for their families and to create a better life for themselves.
The sector also boosts overall sales. We observe social e-commerce complements, rather than supplants, in-store shopping. It is a different experience and consumers like both depending on the specific circumstances. So, yes, Taager’s business model and the social e-commerce sector in general contribute to more robust employment while also benefitting consumers.
Would you consider deploying certain AI-based tools in Taager operations?
AI and machine learning (ML) algorithms are crucial when it comes to making sense of huge, unwieldy amounts of data – this is why we already utilise ML algorithms to improve our efficiency and to drive our decision-making. As innovation in AI and ML moves at an accelerated pace, any company that does not make use of these technologies will quite simply fall behind its competition.
So far we have utilised ML in demand planning and to provide personalised product recommendations to sellers on our platforms. Further uses of AI will no doubt evolve quickly over the coming years and we will continuously evaluate these innovations to see how they can enhance Taager’s service.