THE CHALLENGE. Egypt is situated in the northeast corner of Africa, a country linking northeast Africa with the Middle East. With over 95 million inhabitants, Egypt is the most populous country in the Arab world and the third most populous in Africa.

The availability and affordability of certain goods in Egypt are challenging. Goods ordered from other countries can take between 15 and 40 days to arrive and come at a premium due to currency devaluation and excessive shipping costs. Travel for Egyptians is also expensive with 100% – 150% air ticket inflation. Hatim was aware that online shopping and the travel industry had been gaining traction in Africa and the Gulf Area over the previous five years. He wanted to capitalize on this by developing a marketing-creating innovation that would bring the world to Egypt and ultimately Africa to the world in a more affordable way!

THE PROCESS. Initial research showed Hatim and his team that there were about 50 000 daily online transactions in Egypt. And, according to Cairo Airport Arrivals, around 48 000 travelers landed in Cairo every day – 17% of whom were from the US and UAE. They further identified that 50% of these travelers were addressable and they set out to reach the biggest market share by 2020.

Hatim identified two key components for his venture – buyers and travelers. Buyers are people based in Cairo who want goods that are not easily available or are too expensive to buy via online platforms. “I can get chocolate from Switzerland, boots from Germany and a gaming laptop from the US, delivered to my door within a week. Or, I can visit my nearest Airgiftr official store, who sells products bought and shipped with love by travelers.” Hatim and his team will look at expanding the profile of buyers down the line. Travelers are people based in Cairo who want a partly or fully funded travel option to fulfill buyers’ orders as well as travelers to Egypt who want to be rewarded for bringing goods to Cairo for buyers. “I want to visit New York in Christmas and London in the fall. Now I can, because I’m a certified Airgiftr traveler and can travel fully funded 3 times a year.” With Airgiftr, buyers save on average 40% on their merchandise expenditure and travelers cut their travel expenses by at least $200 US, their fee to bring products into the country for buyers.

The Airgiftr team created an automated technological platform (using AI and machine learning) offering peer to peer as well as funded travel packages for travelers to explore the world while gifting. The concept is innovative, yet simple. The idea is to connect people who want to buy products from abroad with travelers who can buy and deliver the orders when they arrive back home in Cairo. A buyer places an order and pays for it upfront. The traveler then buys matched orders within a few days and gifts it within 5-15 days on his next trip to Cairo. Once delivered, the traveler is reimbursed plus commission. The business model is commission-based, with the start-up earning an average fixed and variable fee of up to $11 US per order placed. Frequent and loyal buyers are rewarded with promo-codes and generous discounts. Travelers earn a variable commission between 15% and 20%, which increases over peak travel and shopping periods, e.g. Christmas, Black Friday, etc.

Hatim and his team had to overcome certain obstacles during the build of their platform. Their system had to connect orders with travelers based on the gifting quota and best practices allowed by customs and shipping regulations in Egypt. They had to match the delivery and distribution model with traveler preferences to improve user experience and business scalability. They also had to understand the needs of local travelers and test the pain points and upsides of their offering.

THE RESULT. The minimum viable product (MVP) version of Airgiftr was launched in May 2018. An MVP is a development technique in which a new product or website is developed with sufficient features to satisfy early adopters. The team also focused on refining its pricing model and traveler incentives. Since May 2018 they have had more than 4 000 successful transactions. By October 2019, they were experiencing monthly revenues upwards of $6 000 US from a base of more than 1 500 active users and showing a gross profit of 14%. Their market research has identified Ethiopia, South Africa, and Morocco as their top three markets and they are looking to launch in at least one of these countries at the end of 2020. 

The company is currently looking for strategic overseas partnerships. “We have successfully built an innovative product with a human-centered operation that is technically sophisticated, yet simple to integrate into marketplaces across the world. What would help us to achieve significant growth is access to industry experts, potential marketplaces in the United States while strengthening our ties with Africa’s products that are export-ready. We believe that scalability needs a good relevant product, a dedicated team, and the right strategic and global partners,” says Hatim. 

The Airgiftr founding team consists of nine members and is looking to expand to meet the complexity and operational capacity needs of the business.