Dubai: All processes related to Amazon’s takeover of Souq.com are now officially complete, but there are no plans for now to change the Dubai-headquartered entity’s identity.
“For now, Souq.com will continue to operate its current websites as is,” said Ronaldo Mouchawar, co-founder and CEO.
It was in late March that the deal was announced after a fairly lengthy bidding process. Prior to the actual announcement, there were quite a few surprises along the way, including speculation that the deal would not go ahead. And just before the transaction closed, there was a bid by another regional entity to acquire Souq.com.
The actual value of the deal remains unrevealed to date. Informed talk suggests it could be in the $600 million (Dh2.2 billion) range.
Monday’s announcement that all formalities are done thus marks a key milestone. During this period, Amazon and Souq.com have had the Middle East e-commerce field to themselves, more so after the much anticipated launch of Noon.com failed to materialise during the first-half of the year. What this provided was the breathing space for Amazon and Souq.com to focus on full integration of their internal processes, further build up its reach with the regional audience, and also pull in more first-time buyers to the portal.
The integration also allows existing Amazon customers to use these accounts to shop through Souq.com.
It also helps Souq.com in firming up partner alliances with the likes of IMG World of Adventure. It creates cross-selling/marketing opportunities, and these could come in handy particularly with shoppers from outside of the UAE and who are planning trips here. So, if they buy something on Souq.com. they get special promotional packages on tickets for IMG’s theme park attractions.
Souq.com has also been making headway on another front.
“Mobile has been a key factor for e-commerce growth over the past 2-3 years and 70 per cent of our sales are driven by mobile shopping,” said Mouchawar. “Smartphones are playing a significant role in shaping consumer habits today.
“The region has a growing number of consumers who are “living online” and therefore understand the benefits of online shopping such as speed, convenience, security and value for money.”
Prior to the Amazon deal, Souq.com had been building its merchandise portfolio, notably by adding scale to its book selection, acquiring a grocery delivery operator and creating “fulfilment centres”, for a more direct interaction with shoppers.
“It is an exhilarating time for the e-commerce industry in the region,” said Mouchawar. “Together with Amazon, our goal is to offer our customers the widest product selection, great prices, improved delivery times and first-rate customer service.”
Sticking to these targets would also offset the imminent arrival of competition of a similar — or near enough — scale.
On whether there are plans to expand the Souq.com workforce, Russ Grandinetti, Amazon’s senior vice-president, International Consumer, said: “We aim to expand in the region over time and we will be looking forward to hire more talent. We are working to quickly integrate Souq.com and Amazon capabilities, in terms of both customer experience and fulfilment.”