E-commerce. A new lifeline for Lebanon's economy
Story by dana Hourany / cover photo by LIU ZONGYA
E-commerce is becoming a popular method of making money in Lebanon, which is grappling with a severe economic crisis. More and more online stores with attractive sales offers appear on social media platforms. Experts say this trend will continue, as such a business model is a suitable solution for challenging economic times.
Growing an online store to earn a living
Due to the difficult economic situation that Lebanon has been in for a long time, 20-year-old Issam is considering opening an online store. The nursing student is looking for a reliable source of income to make a decent living.
"I know many people who work several jobs at the same time. I like nursing, but studying requires a lot of time, so the best option is to work online," Issam tells Eastory.
In the wake of Lebanon's economic crisis, the Lebanese Lira has lost more than 95 percent of its value, and unemployment rose to 29.6 percent in January 2022. As the situation has worsened, banks have significantly restricted citizens' access to dollar deposits.
According to experts, as inflation rises, more and more people will grow online businesses to earn a living. Lebanese began using e-commerce more widely during the COVID-19 pandemic because of strict lockdown measures. In addition, supermarket restrictions have forced many shoppers to buy online. Also, some manufacturers have switched to social media platforms and delivery services.
Photo: People queue to buy bread outside a bakery in Beirut, Lebanon April 12, 2022. Photography by Mohamed Azakir / Reuters / Forum
"It's getting increasingly expensive to set up a traditional retail store. So I think many businesses will go online in a few years. All my friends my age are considering it," Issam says.
Photo: Mohamed Azakir / Reuters / Forum
From the crisis to e-commerce
The data on the state of the Lebanese economy is frightening. Most disturbing is the high unemployment rate, especially among young people. A study by the Central Administration of Statistics and the International Labor Organization shows that as many as 47.8 percent of Lebanese aged 15-24 are unemployed. Unemployment has nearly tripled in the past four years. It is highest in Baalbek-Hermel governorate, which is now at 40.7 percent.
In this situation, young Lebanese are dropping out of school to find work. As a result, the Lebanese workforce will not be adequately educated to meet the challenges of a modern labor environment. It will further undermine Lebanon's position in the global economy, which is undergoing a digital revolution and becoming a knowledge-based economy.
Financial expert Hanan Hamdan says that due to the dire economic conditions, Lebanese are increasingly choosing to run online businesses. It is more profitable because it does not entail as much money as a traditional business.
"E-commerce is more cost-effective because there are fewer expenses to run it. Given the ongoing crisis, e-commerce is a perfect solution," Hamdan tells Eastory.
Photo: Young Lebanese fashion designers participated in the "I Love You Lebanon" exhibition in Beirut, which was held to encourage local talents to develop their businesses against the economic difficulties in the country. Photography by Liu Zongya / Xinhua News Agency / Forum
The expert points out that online trading also enables online store owners to strengthen customer loyalty. It is critically important in a situation such as the economic crisis when steady income is essential for maintaining and developing business in the long term.
Photo: Mohamed Azakir / Reuters / Forum
New opportunities for entrepreneurial Lebanese
E-commerce expansion is an increasingly popular trend globally. This kind of economic activity is relatively new in Lebanon, but the data is encouraging. According to UNCTAD's "B2C E-commerce Index," Lebanon ranked 64th in the world in 2020 but it is getting better at learning how to capitalize on the full potential of its market. The reason for the lag is a shortage of e-commerce platforms and a general distrust of online transactions.
Aida Sabra, a 53-year-old single mother who lives with her daughter and sister in Beirut's southern suburbs, says she has been shopping online for two years. She only started buying groceries online when the supermarket in her neighborhood closed due to the pandemic.
The woman admits that she was initially skeptical about online shopping due to the lack of trustworthy online platforms and the inability to check the quality of products. There is no law in Lebanon to protect consumers from unfair online business practices. It means consumers have little recourse if they are dissatisfied with the products or services they buy.
In its early days, Lebanon's online commerce was predominantly electronic devices. Over the past three years, e-commerce has expanded to include food, designer products, or used clothing. "You can buy anything you can think of," Aida emphasizes. "My daughters are addicted to online shopping and like to discover new deals simply by scrolling on their phones."
The growth rate of e-commerce in Lebanon is fast. Rudy Bekerejian, CEO of Ecomz, an online store builder, says that during the pandemic, the gross value of online sales in Lebanon grew three to five times per quarter. The expert believes that this trend will intensify shortly.
A chance for survival
Marwa Othman, 25, was passionate about art despite her full-time job at an NGO. During the crisis, she teamed up with her sister to launch a Canvart Embroidery store on Instagram.
A year has passed since then. Marwa says she still faces numerous challenges, such as increasing competition in her niche market. "We anticipated these challenges and continue to look for ways to improve our efficiency and attract new customers," she points out.
In recent months, Marwa has become familiar with new ways to make money by shipping products outside of Lebanon, working with Influencers, and creating visually appealing advertising content.
"You can't stand still. You have to create a plan and be persistent in pursuing it. My goal is to earn more income and develop my potential. It's also a hobby I enjoy, so I do it for the love of it," she emphasizes.
According to Hamza Ballout, the 23-year-old owner of the online store Ax-Jewelries, understanding the mechanics of social media is key to succeeding in online sales. However, as he notes, it also takes time to refine the business model so that the venture begins to generate tangible benefits.
"E-commerce is not my priority because I have a full-time job. I need to devote more time and effort to make my side project more profitable," he stresses.
Like Hamza, many entrepreneurs want to turn their online stores into full-time jobs. It seems to be the only chance for many of them, as transportation, rent, and electricity prices continue to rise, and the government is still stuck in a grave political crisis.
Photo: Bilal Jawich / Xinhua News Agency / Forum
