With one of the highest global per capita internet penetration levels and country literacy, almost every business in the Middle East gears up to go the ‘Digital Way’. From 27% in 2013 to 42% in 2015 [Online Shopping Behavior Study: Middle East], there has been a quick escalation in the number of online shoppers.
In many places of Bahrain and the UAE, population up to 90% has access to the internet [Research and Markets] which makes the ground for e-commerce market pretty fertile to flourish. Travel bookings and electronics form the major part of online purchases.
- The countries of the region are growing rapidly and the same is evident from these observations
- The commerce ministry’s initiatives to welcome e-commerce in Bahrain and Oman have helped both the countries
- In the UNCTAD B2C E-Commerce Index 2016, UAE grew by 41 positions
- Bahrain, Qatar, and Kuwait are amongst the Top 10 developing economies in the UNCTAD B2C E-commerce Index, 2016 [Source]
With Amazon adding Souq.Com in its Wall of Fame, there’s been a major topsy-turvy in the e-commerce region of the Middle East market. The UAE-based Souq.com had always been known as the ‘Amazon of the Middle East’. Well, staying true to its pseudonym, the company has merged with the Seattle-based e-commerce biggie Amazon.
Syrian-born entrepreneur Ronaldo Mouchawar (@ronmou) struck a deal with Amazon to settle the deal at something speculated above $650 million. Russ Grandinetti, Amazon Senior Vice President, International Consumer shared his thoughts on the acquisition, “Amazon and SOUQ.com share the same DNA – we’re both driven by customers, invention, and long-term thinking.”
Souq has been the biggest online retail and marketplace platform in the Arab region and has a loyal fanbase already. The young market in the region has already reached maturity for responding to this trend. The website gets around 45 million visits per month [Press Release] and Amazon is set to take full leverage of this stepping stone.
So what does this partnership mean to both the parties?
- Amazon gets a dynamic market of $8.5 billion active users
- Amazon also gets the revenue from 10 million mobile app downloads of Souq
- Souq can grow multitudinously by serving more products and serving to more people
- Souq has already raised commission rates to 20% from 15% for five major niches which implies that the sellers get more business and customers also get more variety and benefit from the competition
- Souq can offer to its customers a wide range of 40 million products on Amazon
The partnership is all in all a big impression for the e-commerce industry. Not to forget, that Noon.com, whose release was announced in November last year, is also preparing for a grand launch in the Arab market. The e-commerce website is the brainchild of Mr. Alabbar., an Emirati billionaire and the founder and Chairman of Emaar Properties.
With big players coming to the e-commerce market of MENA, it is the customers who’d have the most benefits.