A decade ago, the making of a local brand was a distant dream. But things have taken a different turn now, with new-age entrepreneurs positioning hundreds of local brands, focusing on sustainability, in the consumers’ minds.
But, they face foreign rivals wielding many advantages: huge cash reserves, advanced technology, economies of scale in production, desirable products, and a powerful brand name. Often, the survival of local companies is at stake.
But, as inflation soars and recurring currency devaluation in Egypt, homegrown brands are becoming more affordable for the average Egyptian consumer.
Senior Economic researcher at the Free University of Berlin, Radwa Abo Shady, says Egypt’s economic challenges are fuelling the rise of local brands. Its limited resource access and global supply chain disruptions force consumers to seek more affordable and reliable alternatives.
LOCAL BRANDS ARE THE ONLY OPTION
Twenty-four-year-old Mariam Zakzouk said she turned to local brands largely due to the country’s current economic situation. “I used to be able to go to Zara and H&M and buy whatever I wanted. It would hurt my wallet, but it wouldn’t bankrupt me,” she says.
But with every wave of currency devaluation, her reality shifted — from buying one thing this month to needing to save up a couple of months to buy one thing, to entirely abandoning international brands.
“You can’t just shop anymore; plans have to be made, money needs to be set aside. With the newest wave of devaluation, you’re lucky if you have any savings at all.”
CEO and Co-Founder of beauty brand Raw African, Yasmine Fikry, attributes the rise of local brands to the shortage of foreign currency in Egypt, which has made importing foreign products difficult and forced the domestic market to find alternatives.
ACCESSIBILITY OF LOCAL BRANDS
Even though most consumers go to these brands for more affordable options, many brands have incredibly high prices.
Abo Shady says most local brands are not affordable for the average consumer. She says some of these brands’ quality is still far behind their global counterparts, yet their products are highly priced.
The limited accessibility of these brands doesn’t only lie in their price, according to Zakzouk. “A lot of those brands aren’t that popular, which makes finding them a bit of a mission.”
“Many of them are online, so some people get put off because they can’t look and feel what they’re buying.”
She also explains that a personal hurdle for her is size; most local brands don’t have plus-size options.
Offering a local brand’s perspective, Amr Kawashti, co-founder and Managing Partner of clothing brand In Your Shoe, says it is hard to determine “the average Egyptian” purchasing power due to economic instability.
However, he says that local brands have an advantage over their global counterparts as they have a better understanding of the local market and consumer needs, saying it allows these brands to “offer products that align with the preferences and budgets” of the average Egyptian.
“They may also employ distribution strategies that ensure their products are available in various locations, including local markets and shopping centers, making them more accessible to consumers,” says Kawashti.
He adds that there is a wide range of different local brands that target different audiences. He says some local brands specifically target high-niche markets, offering higher-end products that may not be affordable for the average Egyptian consumer.
However, numerous local brands cater to a broader range of consumers and offer more affordable options.
CHALLENGES FOR LOCAL BRANDS
Talking about the hurdles local brands face, Kawashti cites the country’s complex regulatory and legal requirements, which is also a common concern for most Egyptian startups.
“Compliance with labor laws, taxation regulations, and other legal obligations can become more complex as the business grows. Understanding and adhering to these requirements can be challenging for local brands, particularly if they lack the necessary resources or expertise.”
Sourcing quality materials is also a struggle. Finding reliable suppliers and ensuring consistent access to materials that meet the desired quality standards can be difficult.
Limited availability of certain materials locally may require brands to import them, which can increase production costs and logistics complexity.
Skilled labor is also scarce. Kawashti says finding and keeping skilled workers in the fashion industry is hard. Local brands struggle to attract and retain skilled pattern makers and tailors, which can hurt the quality and efficiency of production.
Abo Shady says that limitations imposed by the governments and taxation fears hinder the growth of these local brands and prevent them from competing globally.
WHY LOCAL BRANDS ARE NEEDED
Emphasizing the significance of local brands to the Egyptian economy, especially now when reducing import dependence and creating jobs in various sectors are key priorities, Kawashti says, “Local brands generate revenue, pay taxes, and contribute to the country’s gross domestic product. Local brands also contribute to developing other industries in the supply chain, such as textiles, manufacturing, and logistics.”
Local brands have a cultural impact as well, he adds. “Local brands play a very important role in social impact and community development as they have a closer connection to the local communities they operate in.”
“They support local artisans and craftsmen, and contribute to community development projects. This involvement helps create community and social cohesion while addressing local needs and challenges.”
According to Fikry, the rise of local brands and their exposure through social media has fostered creativity, leading to a surge of small entrepreneurial ventures in Egyptian households.
Zakzouk says that once you step out of the “popular and trendy brands, you’ll find a wide variety of local brands available that may better suit your needs and budget.”
“There’s an option for everyone when it comes to shopping locally. We’re in a country with a deeply suffering economy; we all should be making the switch — from food to hair, to fashion, even if some local brands are overpriced,” she adds.
But the question to be asked is whether consumers would continue opting for these newer brands in the long run, or is this surge in demand just a manifestation of the panic in the air?
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