Amazon is setting a plan to buy Souq, a Middle East online retailer. The global online marketplace has made the first move toward acquiring the online store. However, the information is available on the amount. Souq is now the largest online store in the Middle East, as it offers more than 8.4 million products, which belong to 31 categories. They include fashion, consumer electronics, household goods, baby, and health and beauty products.
What Makes Amazon Interested in Souq
Souq was launched in the 2005, and it has some similarities in common with Amazon. As Russ Grandineti – Senior Vice President of Amazon – said, both Amazon and Souq are driven by invention, customers, and long-term innovation. Despite lack of confirmation on the amount offered by Amazon, leaked info stated tat it was willing to pay about $650m for the Dubai-based online store.
Actually, Amazon is not the only marketplace that is interested in Souq. Before, Emaar Malls also made a offer. The Dubai-based mall even wants to pay $800 m for the online store. Souq is a popular online store in the region. A statistic showed that it has more than 45 million visits a month. The operations are focused in Saudi Arabia, Egypt, and United Arab Emirates.
Grandineti further stated that Souq is interesting as it is the pioneer of e-commerce in the Middle East area. It also offers the customers with great shopping experience. That is why Amazon is interesting in it and wants to develop it with global resources and sophisticated e-commerce technology. Therefore, Souq will be able to offer more interesting shopping atmosphere and experience for its customers.
Amazon Has Won the Battle for Souq?
It seems that Amazon has won Souq.com. This was implied from the statement of Ronaldo Mouchawar – Chied Executive and Co-founder of Souq. He said that Souq has the same principles with Amazon, and acquisition by the global marketplace is a great step to grow the Middle East e-commerce in a better way. The deal for acquisition was set to be completed later this year.
However, neither Amazon nor Souq wanted to disclose any information on the term of agreement. Both decline to comment on it. In its last funding round, Souq was even valued at $1 billion. This made it the most valuable internet-based company in the Middle East region. Souq is supported by global investors, such as Standard Chartered Private Equity, Baillie Gifford, International Finance Corp and hedge-fund firms, such as South African-based company, Naspers Ltd, and Global Management LLC.
Souq will be one of the biggest acquisitions made by Amazon in the last few years, after it bought Twitch for $970 m in 2014. Actually, the US-based e-commerce had begun seeking for a chance to acquire Souq since 2016. The online shopping has performed pretty well since its establishment 10 years ago by Ronaldo Mouchawar, Hussam Khoury, and Samih Toukan. In 2016, it raised $275 millions from its investors, and the online store was predicted to grow by 30% each year. Mouchawar even estimated that the company had transaction values around $20 billion last year.