Amazon Ventures into Middle East market
Amazon will buy the Middle East's biggest e-commerce platform, Souq.com, according to CNN's report.
"Joining the Amazon family will enable souq.com to continue growing while working with Amazon to bring even more products and offerings to customers worldwide," Souq said in a statement.
The statement did not reveal the value of the deal. However, CB Insights valued Souq at more than a billion dollars, after its funding raised $275 million from investors last year.
Amazon had to fight against local competition for the acquisition of the online marketplace. Emaar Malls, an arm of Dubai's biggest real estate developer, pointed out its bid at $800 million for Souq.com.
Founded by Ronaldo Mouchawar, Samih Toukan, and Hussam Khoury ten years ago, Souq has outgrown its competitors and becomes the biggest player in the market. Mouchawar said online shopping in the Middle East was roughly valued at $20 billion in 2016.
In the initial stage, e-commerce was not well-known in the Middle East and the company employed five people in Dubai. Now it has increased the number to 3,000 workers across the Arab world and offers more than 8 million products in 31 categories on its platform.
Analysts at Standard Chartered estimate that growth of e-commerce in the region will reach 30% each year and there are a lot of potentials yet to be harnessed in the market. Goldman Sachs acted as an adviser for Souq.com and assisted in putting the deal in place, according to two of the sources said in Reuter's report.
The Middle East's technology sector, including e-commerce, is expanding quickly thanks to the region's young and tech-savvy millennials. Kuwait, Saudi Arabia, and the United Arab Emirates are in the top seven worldwide for mobile phone penetration.