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.

 

  1. The countries of the region are growing rapidly and the same is evident from these observations
  2. The commerce ministry’s initiatives to welcome e-commerce in Bahrain and Oman have helped both the countries
  3. In the UNCTAD B2C E-Commerce Index 2016, UAE grew by 41 positions
  4. 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?

 

  1. Amazon gets a dynamic market of $8.5 billion active users
  2. Amazon also gets the revenue from 10 million mobile app downloads of Souq
  3. Souq can grow multitudinously by serving more products and serving to more people
  4. 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
  5. 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.

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