Souq.com is the region's largest online retailer and was hailed as its first unicorn, a company with a valuation of at least $1 billion.
Published: Tue 28 Mar 2017, 1:09 PM
Updated: Wed 29 Mar 2017, 12:09 AM
Global e-commerce giant Amazon today announced that it has reached an agreement to acquire Dubai-based e-retailer Souq.com for an undisclosed sum.
"Amazon's entry into the region reflects the visionary foresight of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai, who launched Dubai Internet City in 1999 and adopted the e-commerce and online business legislation of 2002," said His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai.
"Further, it reiterates Dubai's position as a regional and global hub for the world's biggest and leading organizations, fostering in its ecosystem that amalgamates the brightest minds, talent, thought leaders, entrepreneurs and investors from around the world."
While it has been known for a while that Amazon had been trying to gain a foot in the door with its own entry into the region, Souq's acquisition will help it hit the ground running. Souq.com is the region's largest online retailer and was hailed as its first unicorn, a company with a valuation of at least $1 billion.
In a media statement, Souq said that joining the Amazon family will enable it to continue growing while working with Amazon to bring even more products and offerings to customers worldwide.
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"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," said Souq.com CEO and Co-Founder Ronaldo Mouchawar.
"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."
Nadeem Khanzadah, head of Omnichannel Retail at Jumbo, said the acquisition of Souq.com by Amazon could be highly beneficial for shoppers in the UAE who would experience faster Amazon shopping.
"We are looking forward in partnering innovations in retail like the AmazonGo that involve brick and mortar presence. e-commerce is expected to be the next mega-trend for businesses across the region and the industry is expected to grow exponentially and be valued at over $10 billion by 2018," Khanzadah told Khaleej Times.
"Amazon and Souq.com share the same DNA - we're both driven by customers, invention, and long-term thinking," said Russ Grandinetti, Amazon Senior Vice President, International Consumer.
"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."
Subject to closing conditions, the acquisition is expected to close in 2017.
Earlier this week, it was rumoured that Emaar Malls too was interested in the Dunai-based e-commerce giant, bidding $800 million (Dh3 billion) for Souq.com.
Last week, Financial Times had revealed that Amazon had agreed to buy Souq.com in a deal worth more than $650 million although today's deal announcement does not disclose the value of the transaction.
Even as another source told Khaleej Times that the news of Emaar Malls bidding for Souq.com was a 'rumour', Souq.com itself had declined to comment on news about the bids.
The region's fast-growing e-commerce sector is set for further competition with the imminent launch of Emaar Properties Chairman Mohammad Alabbar's Noon.com, a mega online retailer to be headquartered in Riyadh.
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