Internet giant Amazon has decided to enter the Middle East’s nascent e-commerce market by striking a deal to buy Dubai-based online retailer Souq.com.
The announcement of the deal, which was reportedly worth around $650 million, ended months of speculation about Amazon’s ambitions in the region.
“Souq.com pioneered e-commerce in the Middle East, creating a great shopping experience for their customers. We’re looking forward to both learning from and supporting them with Amazon technology and global resources. And together, we’ll work hard to provide the best possible service for millions of customers in the Middle East,” Russ Grandinetti, Amazon Senior Vice President, International Consumer, said in a statement.
Souq.com, founded in 2005, stocks 8.5 million items on its website and generates about 50 million monthly visits. It delivers to the six Gulf Arab states and Egypt.
Ronaldo Mouchawar, Souq.com’s CEO and co-founder, said the takeover deal would help push his company to the next level. “We are guided by many of the same principles as Amazon, and this acquisition is a critical next step in growing our e-commerce presence on behalf of customers across the region,” he 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.”
Online sales in the Middle East only amounted to $5.3 billion in 2015. But according to research carried out by consultancy AT Kearney, this figure number is set to rise to $20 billion by 2020 with annual growth rate of 30 percent.