The domestic mobile market has experienced a strong challenge since the liberalisation of the exchange rate last November, where the market witnessed a situation of rapid price increases during the past few months and following the flotation of the pound. The Central Bank of Egypt (CBE) had decided to liberalise the dollar exchange rate against the pound in November 2016, in a strong inflation wave.
According to Bassem Megahed, CEO of Raya Trading, a subsidiary of Raya Holding, the mobile market witnessed a sharp decline in sales over the past nine months compared to the same period in 2016.
According to Megahed, mobile phone sales in Egypt fell by 30% from January to September compared to the same period in 2016, believing the market would recover slightly in the second quarter (Q2) of next year.
In the opinion of Raya’s CEO, the main reason for the sharp decline in sales of the mobile market locally is due to the strong wave of inflation witnessed by the market during the past period after the liberalisation of the exchange rate reduced the purchasing power of the Egyptian consumer, which caused a reprioritisation between spending on the basic needs of food, clothing, and drink, and between the acquisition of new phones.
Raya Trading offers exclusive distribution services to some brands, such as Nokia, and other non-exclusive brands, such as Lenovo, as well as providing maintenance and sales services for a number of other strong brands in the mobile industry.
Mobile manufacturers increased their prices during the month of September last year by 11%, and the sales of the mobile market locally during the first quarter of last year by about 7% compared to the same period of the previous year according to indicators issued by the “GFK” research. Market sales during the months of January, February, and March of last year were 4 million mobile devices compared to 4.3 million mobile devices during the comparative period of 2015, losing about 300 thousand devices.