(Source ABS-CBN/AFP | 29 March 2017)
Tech giant Amazon expanded its global reach with the announcement of a deal to buy Dubai-based Souq.com, the Middle East’s largest online retailer.
The agreement brings Amazon into a fast-growing market as it continues to invest in its core retail network despite expanding into a wide range of services.
Founded in 2005 as an auction site, Souq.com has evolved into a retailer and a marketplace for third-party sellers.
In a joint statement announcing the agreement, the two companies said the deal would be finalized this year “subject to closing conditions”.
Souq.com chief executive and co-founder Ronaldo Mouchawar said, “by becoming part of the Amazon family, we’ll be able to vastly expand our delivery capabilities and customer selection much faster, as well as continue Amazon’s great track record of empowering sellers.”
Souq.com won a major vote of confidence last year and emerged as the highest-valued internet company in the region when it secured $275 million in funding from international investors to support its growth.
Known for its huge online retail operations, Amazon has been expanding into areas including cloud computing and streaming video where it is trying to rival Netflix. But online shopping remains at its core, with its retail operations taking in $26 billion in North America and $14 billion in the rest of the world in the last quarter of 2016.
Souq.com attracts over 45 million visits per month.
But the Middle East continues to have a “significant untapped e-commerce potential”, according to a report last year by consultancy McKinsey, which put the region’s e-commerce at around one percent of total retail.