LebMall and WIB: digital entrepreneurship in Lebanon
What weak institutions, costly infrastructure and strong personal networks mean for online businesses in a developing country.
- Sector
- E-commerce (multi-vendor marketplace; beauty and health retail)
- Source
- Digital Entrepreneurship case collection, chapter by Samara and Terzian (2021)
The case in brief
The authors interviewed an expert and two founders; the company and founder names are pseudonyms. LebMall is a multi-vendor e-commerce site that lets brands sell to customers and takes a commission, with its own shipping. The founder calls it the “mini-Amazon” of Lebanon. He and his family started it when their real-estate business suffered in Lebanon’s economic decline, and family wealth and reputation provided the capital and the vendor contacts.
WIB (“Women In Business”) is an online beauty and health shop started by a young woman with modest savings. She built trust through her personal network, selling at a dance event organised by her brother and finding a delivery firm through an acquaintance. Her team is made up of friends with design, photography and customer-support skills.
Both face weak institutions: no e-commerce or consumer-protection law, blocked PayPal, costly payment services, e-signatures that are not recognised, slow and expensive internet, and no bank loans for entrepreneurs. WIB uses cash on delivery; LebMall pays for imported Cloudflare servers so pages load fast enough.
Key facts
- LebMall staff and capacity
- Twelve employees supporting up to 1,000 orders per day
- LebMall internet cost
- $2,000 a month for Wi-Fi (vs about $50 in developed countries, per the founder)
- Local payment system commission
- 3% per transaction (founder says it should be 0.5%)
- Vendor contracts
- Sent by courier as printed copies, taking two weeks
- WIB delivery fee
- $5, free above $75
Analysis through module theory
PESTEL (Week 1)
The barriers cover political (corruption, weak institutions), economic (costly payments and internet, no bank loans), social (preference for touching products, attitudes to young female founders), technological (slow internet) and legal (no e-commerce law, e-signatures not recognised) factors.
Networks and social capital (Week 8)
Personal connections replaced missing institutions: they brought LebMall its vendors and fast internet, and brought WIB its first customers and its delivery partner. The expert interviewee says personal connections set how many contacts you have, while social capital sets their quality and variety.
Family firms (Week 3)
LebMall is a new venture of an existing family enterprise, funded by family wealth and helped by the family’s reputation. It shows how family resources can make up for weak capital markets.
Intellectual property (Week 11)
LebMall registered its photos for copyright, but copycat stores still took them. This shows why IP protection has to include enforcement in the target market.
Discussion questions
- 1.Which barrier would most affect a digital venture entering a country like Lebanon, and how would you plan around it?
- 2.How did social capital make up for weak institutions in each case?
- 3.The authors call these problems part of the entrepreneurs’ embeddedness in a developing context. How would you use embeddedness in your Individual Report?
Takeaways
- Digital businesses still depend on local institutions, payments and infrastructure.
- In weak institutional settings, personal networks and family resources become key assets.
- Online selling may need offline trust-building, such as events or cash on delivery.