December 3, 2020

How One Start-Up Is Oiling The Wheels Of Business In Libya

Around the world, the Covid-19 crisis is pushing more people to browse and buy online, rather than take the risk of venturing to a physical shop. That impulse can be even stronger in a country suffering political turmoil. In a place like Libya, for example, the idea of e-commerce can seem particularly compelling.

“Not only with Covid, but also with the civil conflict in Libya, people don’t want to go half-way across the city to just have a browse,” says entrepreneur Saleh el Busefi. “Especially if they’re able to do that from their mobile phone and have it delivered to their workplace or their home.”

El Busefi grew up in London, U.K. but has been living and working in Libya on and off for the past decade. For most of that time, the country has been engulfed in a violent civil war following the collapse of the Muammar Gaddafi regime in 2011.

When El Busefi first arrived, he took a job with local investment firm Lafico, but he has pursued a few of his own ventures too. “You don’t want to put all your eggs in one basket, particularly because Libya is such a volatile area at the moment,” he says.

For a time El Busefi traded in luxury watches. He was also a camel merchant for a while, buying the beasts in the south of the country, transporting them up to the coast and selling them on to butchers in the capital Tripoli. “That was a very good business,” he says. “Very challenging but extremely good business once you get into the swing of it.”

These days though, El Busefi’s focus in on e-commerce, having set up The Supply Company to sell automotive and industrial spare parts and accessories, such as tyres, lubricants and filters, online.

He began to flesh out his plans for the business soon after getting married in December. “Things really began to kick in during the Covid outbreak. My wife and I had a lot of time on our hands due to being locked down in Italy,” he explains.

The company sources its supplies from around Europe, dealing directly with producers and refineries, not least to ensure no counterfeit goods end up on its site.

“Libya is flooded with fake products,” he says. There is counterfeit everything; cheap products imported from Ukraine, Russia and China. That’s why we tell our customers that we only deal directly with refineries and manufacturers, to counter that.”

Online security

Internet use is growing in Libya – mostly accessed via phones rather than PCs – but it still lags behind many other countries and local e-commerce businesses have to innovate to survive. For one thing, making deliveries to customers safely can sometimes be a challenge.

“Right now we’re focused on Tripoli, but we also deliver to nearby cities like Zawiya and Misrata,” says El Busefi. “During the day there are no problems, but you’re not really going to want to be delivering something at night-time in those areas. From a security standpoint you just have to take care. If things have kicked off somewhere in the area then you do worry.”

Libya throws up numerous other commercial challenges, from dealing with currency fluctuations to a lack of trade finance for small businesses.

To get around the latter issue, El Busefi’s company joins letters of credit opened by other businesses that are not being fully used. When it comes to currency risk, it tries to smooth out the market fluctuations for its customers.

“What typically happens is merchants raise and lower their prices depending on the black-market rate of the Libyan dinar against foreign currencies,” explains El Busefi. “What we do is find a middle ground and fix our prices so that, regardless of fluctuations, we offer our customers the same price. We roll with the punches when the exchange rate fluctuates.”

El Busefi says it is “too soon” for the company to be making a profit, but he aims to reach that threshold by mid-2021, once the business has built up market share and customer loyalty. In the meantime, he sees plenty of opportunity despite the difficult situation the country as a whole finds itself in.

“With all of the conflicts and power shortages, there is a lot of business to be done,” he says. “My friends and family tend to think I’m a ridiculous optimist when it comes to Libya, but when you’re right down it can probably only get a little bit worse and then a whole lot better. There’s so much upside. I believe Libya is only going to prosper and improve once it gets through the current challenges it has.”

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