Nilli Zaher, an Egyptian woman in her 30s who works as an accountant for one of the country’s largest firms, did not wish to stand idly by amid what she describes as a massive price increase for basic goods, especially clothing. Although her job provides her with an income that meets her and her family’s needs, with the support of her friends, Zaher launched a Facebook group where members can put up a basket of used clothes that they no longer need for barter or sale. The group goes by the name "Women Against Rising Prices.”
Zaher believes that many Egyptians are unable to purchase their basic necessities, particularly clothing. Speaking to Al-Monitor, she said that prices for many goods “have doubled more than once over the last two years,” and, according to her, those prices have no controls worth mentioning and there is no official body in Egypt that can get them under control.
Zaher said that Egyptians have grown accustomed to stockpiling many clothes, even when they do not need them. She also claimed that the economic conditions that Egyptians are now experiencing have forced them to consider bartering these stockpiled clothes or selling them at reduced prices from what the market could command, as long as they are in good shape.
She said that the main goal of her Facebook group is to promote a culture where Egyptians are not embarrassed to purchase used goods and to assist one another in buying high-quality clothing in good condition at far below market price. And, in her view, most of these goals are being realized. Zaher stressed that nearly 30% of the deals showcased on the Facebook group are acceptable to both parties. So much so that it has caused group members to search for other items to post for sale, such as household appliances and occasionally books.
Zaher admitted that the decline in the local currency’s value has led to price inflation among basic goods, yet at the same time she accused merchants of exploiting any crisis to raise prices to what she views as an exaggerated degree. She added that this exploitation has a negative impact on many Egyptians who are not able to afford the basics and are too ashamed to go to the market for used clothes.
Muhammad Ismail, the owner of a clothing store in downtown Cairo, sought to allay allegations that clothing retailers are exploiting economic crises, telling Al-Monitor, “Egyptian-manufactured clothes as well as imports have undergone rapid price increases over the last three years. This owes to the rising costs of items necessary for their production, which have been greatly affected by the rising value of the American dollar against the Egyptian pound, and the failure of factory owners and importers to obtain green currency from banks.”
Ismail also attributed the rise in prices to “restrictions imposed by the government on the import of basic goods, which were enacted in an attempt to encourage Egyptian producers,” and noted that there have been large increases in customs fees in recent years.
At the end of December 2015, Egypt’s Minister of Trade and Production Tarek Kabil issued two decisions on this matter, Nos. 43 and 992, which created a registry at the Egyptian General Organization for Export and Import Control for manufacturers qualified to export finished products to the Egyptian market. According to the regulations, imported products can only be released if they are assembled by facilities that have registered with this system. The registration specified a number of conditions that businesses must meet in order to obtain valid legal standing for their factories in the country of origin.
Ismail said that his store, despite being located in a commercial district frequented by thousands on a daily basis, was unable to generate enough business for him to provide for his family’s needs, and that it had endured losses for two consecutive seasons. He added that he is seriously contemplating the possibility that the coming winter 2017 might be his final season in business, as he is afflicted with “severe depression,” which is also afflicting other retailers.
Yahya Zananiri, the head of the ready-to-wear garments division in the Egyptian Chamber of Commerce, told Al-Monitor, “Discarded clothes for the 2016 season exceeded 50% of the total supply.” He added, “The situation in the clothing market in Egypt has been in decline for four years, and the economic crises that Egyptians are suffering has wreaked major harm on clothing production and retail.”
Zananiri said that clothing prices for the approaching winter will increase by around 30% for locally manufactured goods, owing to raw material price increases in excess of 50%. As for imported clothes, he said the fall in the price of the Egyptian pound and rising customs will cause them to nearly double.
Zananiri said that the decline in purchasing power for lower and middle classes of consumers has caused most retailers to worry about their businesses. He noted that some global apparel chains operating in Egypt have cut the number of branches in operation. He ascribed this to the tendency of these outlets to rent locations at high prices and pay high monthly wages, which has forced them to continually seek a large margin of profit. This has not happened in the last several seasons.
Zananiri expects that local retail outlets, as well as medium and large apparel chains, will decrease the inventory they are offering; however, he dismissed as unlikely the possibility that they would halt their activities altogether.
Zananiri expressed his own hope that the market would show discipline ahead of the winter 2017 season because of the scarcity of imported products in the market as compared with previous seasons. In addition, most local manufacturers are moving to reduce their production, which will cut the share of basic goods in the market, thus keeping pace with slackening demand. He said that most of the problems of previous seasons were attributable to a vast gulf between inflated supply and relatively low demand. However, he believed conditions would only improve if the security forces concentrated their efforts on combating clothing smuggling as a guarantee to ensure equal opportunity between retailers.
Regarding the exchange of used clothing between segments of consumers, Zananiri said that this type of activity has gone on among Egyptians for a long time, especially within family confines. However, he stressed the Egyptian consumer typically finds it very difficult to accept the idea of depending completely on used merchandise, particularly clothing. He believes that the circulation of used clothing on an individual basis will not have a significant negative effect on the clothing market. However, the difficult circumstances now afflicting the market’s foundations might.
Zaher agrees with Zananiri that the activity of the group is not greatly widespread such that it might negatively impact the ready-to-wear clothing market in Egypt. However, she believes that if prices continue to rise in the manner that they have so far, it will only increase the importance of exchanging used clothing. She noted that, despite Egyptians’ love of purchasing new clothes, the poor economic situation from which most Egyptians are suffering will force them to give this up in order to meet their basic needs.