Amazon set to fully acquire UAE's Souq.com at $1 bn valuation
23 March 2017
Online shopping giant Amazon, after initial hesitation, has finally agreed to carry out a complete acquisition of UAE-based ecommerce site Souq.com.
Reportedly, 78 per cent of all online shopping in the Middle East and North Africa is on Souq's ecommerce site. Souq was valued at $1 billion, after raising $275 million from investors including Standard Chartered Bank.
After discussions stalled in January over the price demanded – nearly $1 billion – Amazon came around once again to explore the opportunity. Also part of the initial discussion was Indian unicorn Flipkart, which also opted out of the deal. In the running until much later were other prominent entities, like the mall operator Majid Al Futtaim, which also eventually pulled out of the race after being outbid. A report in The National confirms that Amazon has finally taken on this deal.
As of now, Souq has 8.4 million products on offer, after adding books and groceries on to its marketplace. Upon taking over Souq, Amazon faces the most formidable threat from noon.com, which is also worth $1 billion, and was set to launch in January housing 20 million products, but has faltered on its timeline and is yet to go live. Noon is backed by Emirati billionaire Mohamed Alabbar and the Saudi Public Investment Fund.
Closer home, India clocked around $14-14.5 billion in ecommerce sales in 2016, and Amazon had just about managed to trump the sales of key competitors in Indian ecommerce, Flipkart and Snapdeal, for a few months.
Many analysts are calling India a litmus test for Amazon, in order to establish itself as a contender in non-traditional markets outside of North America and Europe – especially after being defeated in the Chinese market by the defending champion, Alibaba Group.