The Middle East has its own Amazon – introducing Souq.com. Souq has earned this prestigious label, not only because it is the largest ecommerce platform in the region, thanks to 45 million visits per month, but also because it was acquired by Amazon in March 2017. The marketplace’s main office is located in Dubai (UAE), with localised operations in Saudi Arabia and Egypt. Souq is also able to deliver to neighbourhood markets, including Kuwait, Bahrain, Oman, and Qatar.
A success story
Souq launched back in 2005 when the co-founder and today’s CEO, Ronaldo Mouchawar, launched a local auction site. The platform’s biggest pre-Amazon game changer was in 2014, when Tiger Global Management and Naspers Ltd backed the company with substantial investments, helping the marketplace to thrive in the region. Then, in March 2017, the Amazon deal was finalised. This changed the outlook of the company:
“By becoming part of the Amazon family,” stated Mouchawar, “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.”
American technology and Middle Eastern knowledge
Souq is extremely well placed, benefiting from access to Amazon’s technology and global resources, combined with local expertise. This has given Souq an advantage when it comes to tackling growth challenges around Middle Eastern ecommerce.
In the UAE, the platform emerged as a winning player because, according to a Mastercard study, local consumers prefer to use local websites rather than foreign sites, primarily for their “convenience and economy”, and secondly due to consumers confidence that there won’t be any hidden charges – something that is seen as an issue on international websites.
Desirable products and continued growth
Middle Eastern consumers are specifically searching for household appliances, electronic products and travel-related items when shopping online. Therefore, Souq has made sure it stocks the best-selling items among these three categories, as well as providing a variety of products from the fashion sector.
Serving a total of some 50 million consumers across several countries, Souq is well placed in a market that has relatively little competition. The platform has grown to offer 8.4 million products across 31 categories and is still accelerating. However, only 2% of all retail expenditure is currently made online in the Middle East. This means there is still a huge potential for continued online growth.
Sell On Souq | An ecommerce experience customised for the Middle East
Marketplaces that operate in the UAE usually need to address critical issues around fraud, cash-on-delivery (COD) payments, lack of postcodes and the huge popularity of malls as social destinations. But the rise of easy-to-use, secure ecommerce platforms is inevitable. Noon, Mumzworld, Namshi, Wadi and Souq, are all signs of the coming age of ecommerce for the UEA and the wider region.
A high level of disposable income, good infrastructure (the UAE is ranked as 13th in The World Bank’s Logistic Performance Index) and ease of internet access, is making online purchases a natural fit for UEA customers.
The convenience and safety of online transactions are quickly turning ecommerce into a habit for an increasingly large number of shoppers in the Middle East. Yet, many local consumers have shown reluctance to purchasing goods and services online – especially using a credit or debit card. This situation forced banks and local online businesses to allow COD, even though it often involves complications, especially in cases where a refund must be processed.
Souq offers payment by credit or debit cards (Visa and Mastercard), PayPal and COD (but at an additional charge). It also permits payment in instalments – especially for hi-tech items, thanks to partnerships with several local banks (NBAD, ADCB, Emirates Islamic, Emirates NBD). The CashU service – a prepaid online and mobile payments system, previously owned by the marketplace, is also an option.
In order to be able to offer reliable and guaranteed deliveries, Souq has developed a fulfilment infrastructure that can take care of all the seller’s deliveries if requested. The “fulfilled by Souq” programme includes free shipping for orders over £30 (150 AED) and customers can return a purchase online or by phone for free within 15 days of purchase – with a 100% money back guarantee.
On Souq every purchase, even if handled by sellers, must be followed by a tracked shipping to its destination.
Thanks to an authenticity guarantee that covers a full refund and applicable shipping fees, Souq ensures that sellers which trade in fake branded products are permanently banned and prosecuted. This protects official branded products from being undercut on price.