Amazon will acquire the Middle East's largest online retailer Souq.com, the two companies said in a statement on Tuesday without disclosing the value of the deal.
The announcement comes a day after Dubai-based Emaar Malls confirmed offering $800 million to acquire Souq.com.
Emaar Malls is headed by chairman Mohamed Alabbar, who is also set to launch the $1 billion ecommerce portal Noon. Acquiring Souq.com, the largest online retail and marketplace platform in the Arab world, makes sense in that context.
The $1 billion to the Noon project will be 50 percent owned by the Saudi sovereign wealth fund, Public Investment Fund (PIF). The other 50 percent will be owned by Alabbar and other regional investors.
At the media launch for Noon.com, Alabbar had described his new venture as “game changing” with 20 million products on the platform on day one when it launches.
Amazon, which walked away from talks with Souq.com earlier this year, had offered up to $650 million (600 million euros) for the company, according to Bloomberg.
Bloomberg reported that other suitors like the mall-operator Majid Al Futtaim and India’s Flipkart Online Services Pvt Ltd.
In February 2016, Souq.com had completed a funding round of more than $275 million (Dh 1 billion), the largest financing of an e-commerce business in the Middle East.
The Middle Eastern company’s investors include Tiger Global Management and South Africa’s Naspers Ltd., Standard Chartered Private Equity, IFC (a member of the World Bank Group), Baillie Gifford , and many reputable regional and tech-focused financial institutions.
Souq.com had appointed Goldman Sachs Group to find buyers for a stake last year, people familiar said.
Souq.com features more than 1.5 million products across 31 categories such as consumer electronics, fashion, health and beauty, household goods, and baby.
It attracts over 45 million visits per month, with localized operations in the Saudi Arabia, UAE and Egypt.
E-commerce in the Middle East is continuing to show robust growth, supported by the acceleration of m-commerce.
According to a recent report by global consultancy AT Kearney, the e-commerce market in the GCC countries is expected to grow phenomenally to $20 billion (Dh73.4 billion) by 2020 from $5.3 billion in 2015.
As the regions’ tech savvy shoppers are embracing e-commerce, this growth in consumer adoption is paving the way for more product categories to come online.
Souq.com has been adding many new services and features and product categories in the last six months.
In November 2016 it launched the Souq Superstore for grocery shopping on its platform with ahuge assortment of products within six sub-categories: Food & Grocery, Health & Beauty, Household Needs, Pet care, Nutrition & Supplement and Baby Care & Food. In addition, within the Souq Superstore there are curated stores including an organic food corner, chocolate shop and ‘food of the world’, available for delivery to all customers across the Saudi Arabia, UAE, and Egypt.
In January this year, it announced the launch of their automotive category in Sauto provide a huge selection of car accessories online at the most exciting deals. The automotive category was one of the region’s first for an e-commerce platform- enabling customers to choose from the largest assortment of car care products and accessories at the click of a button. The new category featured interior and exterior car accessories, spare parts, tyres, audio and video systems, GPS navigation systems, car care protection products as well as car tools and devices.
Last month, Souq.com launched its latest category, Global Bookstore, to provide customers access to over 6 million books on the platform. The Global Bookstore features a phenomenal assortment of books covering all classifications including culture, children, family, education, business and many more, to cater to all readers in the UAE and neighboring countries.