Arab Finance: Throughout the past three years, COVID-19 and social distancing have not only shown the importance of digitizing work, but also digitizing shopping. 72% of Internet users in Egypt depend on online shopping for food, clothes, electronics, etc. Many users hunt for deals, discounts, and bargains. With the shift towards digitalization and technology and the Central Bank of Egypt’s (CBE) financial inclusion plan, companies that provide online bargains, deals, and payments have been achieving success in the Egyptian market.

Arab Finance sat down with Tarek Magdy, Founder and CEO of Waffarha, to discuss how the company mediates between customers and service providers, the industry’s biggest challenges, and the effect of Buy Now, Pay Later (BNPL) technology on digital services.

What can you tell our readers about Waffarha’s market edge and what differentiates it from its peers? what it does do?

Since launching in 2012, Waffarha has become a leading marketplace for offers “Purchasing digital vouchers” for all essentials and luxuries needs of life such as food and beverage, entertainment, health, beauty, etc. Our services are free of any subscription fee. Besides voucher purchasing, we have added the bill payment service so that customers can pay all their bills in one place.

Furthermore, we aggregate our offers on other apps like JumiaPay and My Etisalat, so their customers can purchase and pay for Waffarha offers using their cards/points via the apps.

By 2018, we started our Business to Business (B2B) model with organizations, like banks and telecom operators, providing tailored loyalty programs and white-label solutions for rewarding their customers and employees according to seasonality.

With the growing trend of BNPL, how can this complement your service?

It surely complements our services for two reasons. Firstly, our customers are very smart looking for every savings opportunity they can, and availing of the BNPL service on Waffarha made customers' ticket sizes for purchased vouchers and paid bills much larger. In this way, they take advantage of both discounts and installment payments at a higher rate than they would if they paid through other means that are deducted directly from their monthly budget.

Secondly, as we look forward to our business, we have managed to have a very attractive customer acquisition cost, and the more we put value-added services to our customers, the greater the retention, and accordingly, the flywheel effect on our numbers

How is this also in line with the CBE’s financial inclusion goals?

We consider that our services align with CBE’S financial inclusion goal by providing our services digitally and using online payment methods only. Moreover, we have provided over 10 payment methods that include banking cards, installments using banking and non-banking methods, and mobile wallets from banks and operators.

The company is known to provide deals for both products and services. Can you explain to us what services can be discounted and how you liaise this with service providers?

We provide digital vouchers for Services/Products redeemed at our services provider “Merchants network”. It is one of the largest networks in Egypt which consists of more than 1,000 merchants with over 5,000 branches in big well-known chains like Americana, Cinnabon, Heart attack, Buffalo Burger, Cook Door, and Cilantro in the F&B category. Besides brands like Ski Egypt, Zed Park, Vox Cinemas, Magic Planet, Snow City, and Renaissance Cinemas in the Entertainment category.

How it goes? It is so easy and takes a few steps. The customer selects his chosen offer, adds the voucher/s to his cart, and pays. The voucher appears in his account once payment is successful and confirmed.

Next, the customer heads to the service provider/merchant branch, asking to redeem. The merchant redeems the voucher on our activation portal/app or through a point of sales (POS) machine (over 600,000 POS like Fawry, Aman, Gedia, Paymob, and Foodics).

Also, how does the company still guarantee top-notch quality products despite the discounts?

We carefully select our merchants who are committed to our service standards and honor our deals and customers. On one hand, all merchants undergo a mystery shopper process to ensure the customer receives the same quality and quantity of service as expected. On the other hand, we also have an open channel for customers to leave reviews after the redemption process is completed, and as a result, the offer is given a rating based on the number of stars it gets. Furthermore, we follow up on the reviews and contact the merchant’s team to flag to them about customers' ratings and complaints. If these issues are not solved, we take the action of terminating our contract and compensating the customers.

Can you share with us the company in numbers and shed light on the company’s performance? For instance, what are your year-on-year (YoY) growth rates? What are the company’s revenues and profits? Etc.

We believe 2022 was an exceptional year in our past 10 years of performance, we have reached over 4 million customers with more than 1.6 million transactions during 2022. 

 2022’s total sales have exceeded $10-12 million with a growth rate of 2.5x from 2021 and 10x from 2020.

In addition to all of this, we have remained bootstrapped as a profitable company, having received funding over 5 years ago that was a fraction of our sales.

What would you say are your industry’s biggest challenges? And how is the company addressing them?

We had several challenges getting our customers and merchant network to deal online with digital options, but after some time with strong relations with merchants and customers, these challenges no longer exist as digital adoption increased substantially.

Can you elaborate on your future plans?

Our focus in 2023 is mainly towards launching our operations in a GCC country, where we have taken steps to achieve that, in addition to, adding more services that we can cross-sell in line with our very numerous and fast-growing customer base.

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