Credit cards, internet access, and online bill pay: Moroccan e-commerce is booming

Money Transfer

Without a doubt, e-commerce in Morocco is experiencing a peak of interest. Over the last seven years, we’ve seen, at my startup Synergie Media, an explosion in demand for online payment options. And every time I speak at entrepreneurship events, I get at least one question on e-commerce. It's high time to do an overview of the sector.

The country counts more than 6.9 million internet subscribers, according to the National Agency for Regulation of Telecommunications (ANRT), with average quarterly increases of 10.6%, and yearly increases of 57.3%. By the end of March 2014, the internet penetration rate had stabilized at 19.45%, meaning that 16 million Moroccans – around one in five – had internet access. Interestingly mobile internet exceeded DSL in terms of sheer number of registrations; mobile internet now represents 86% of the market share.

According to Maroc Telecommerce, the first e-commerce operator in the country, the amount of purchases and payment online has increased from $3.8 million USD in 2008 to $90 million USD in 2012, with more than 1.25 million transactions on the platform alone. The Interbank Monetary Center (CMI) also reported high figures, claiming that 9.5 million credit cards were in circulation in 2013, and more than 171 million online bill pay transactions were undertaken between January and September 2013, totaling $17.7 billion USD.

In a nutshell, these figures mean that a) more Moroccans than ever have regular access to the internet, b) Moroccan banks are issuing more credit cards than ever before, and c) More Moroccans than ever are paying their bills online.

The market players

So, who’s benefiting from this boom? The answer is both traditional banks and the new e-payment players and e-retailers.

The online payment service provider (PSP): The first Moroccan PSP was Maroc Telecommerce (MTC) which has been operating since 2001 as an initiative led by an organization of several banks. The last months have seen some new faces; the most publicized of which is, without a doubt, AmanPay, which seeks to position itself an alternative solution to e-payment. The launch of these new services hasn’t been quiet, as we explained in a January article.

The Interbank Monetary Center (CMI): Founded by nine Moroccan banks, the CMI is an organization mandated by the banks to regulate payment systems in Morocco. When they bought MTC, the CMI created a de facto monopoly that has been under fire. Wamda reviewed the situation back in January.

The banks: There’s no doubt that the banks have one thing on their minds: to promote as much as possible the use of the internet to boost online transactions, and account management. To do so, they’ve created a variety of iOS and Android applications, and have broadened the array of credit cards available. Credit cards for purchases on national websites now carry annual fees of around $6 USD, whereas those for purchases on international websites cost around $13 USD per year.

The e-retailers: According a report recently published by Averty in collaboration with The Nexties, Moroccans mostly purchase deals and travel online, then, to a lesser extent, electronics and clothing; they also pay bills and use web services. Read more figures here.

Here are the main local players:

    Jumia, the Amazon clone launched in great part by Rocket Internet
    Hmizate, the deals website that raised $1.6 million USD
    Hmall, the e-marketplace created by Hmizate
    Shoppeos, the e-commerce website of textile specialist group Azran
    Microchoix, the electronics, and appliances specialist

This boom could be even bigger

The growth of Moroccan e-commerce could be even faster if its availability and the demand for it hadn’t been slowed by many factors.

The administrative procedures needed to implement an online e-payment platform are too complicated and expensive for micro-enterprises and craft and agricultural cooperatives to go online. These procedures need to be simplified and the costs must be lessened.

Retailers must also make the effort to translate their websites into Arabic, a untapped high-potential sector, and focus more on mobile.

Efforts must also be made to improve user experience and build trust. This could start with more transparency, for instance displaying the company’s address, certificates, and logo of the company’s PSP, and implementing a messaging service for the clients to chat with the people in charge.

E-commerce could also benefit from better communication, especially on social networks. A better use of these mediums could enable the e-retailers to spread the word about their websites and to turn clients into brand ambassadors.

The seeds of a promising market

The evolution of the available offers, the focus on security, and the arrival of new players all speak to the market’s great potential. We’ve already talked about the payment service provider, but you also have to account for new off-the-beaten-path retailers, like e-deli Maroc Terroir or fair trade website Blad Lkhir.

Another promising fact is the growing focus on online security. The 09-08 law regarding the protection of personal data requires websites and PSPs to protect users’ data against abuse and theft. Also, in April, banks began launching a 3D Secure authentication system, in order to limit fraud and insure clients and retailers. This new system requires a special code to verify user identity for online transactions, in addition to the credit card number, expiration date, and cryptogram.

For Moroccan e-commerce, the best is clearly still to come.