Amazon.com Inc. acquirer the Souq.com in $580 million in the year 2017 to penetrate in a Middle East market which was said to be the biggest deal ever made in Arab.
Souq.com that is recognized as the “Amazon of the Middle East” that has 45 million of traffic per month, which retails in electronics, fashion products & accessories, home décor & appliances, and other goods & services. It’s said to be the biggest online shopping store in the Arab world.
For Amazon, Souq.com is like a gold mine which is expanding the e-commerce market in the Middle East rapidly with the adoption of technology by the population. As Saudi Arab, Kuwait, and United Arab Emirates are rated as the top global markets for the penetration of mobile phones.
Why Amazon acquired Souq.com?
Sometimes query arise in the mind that why Amazon acquired Souq? It can be entered in the region too by its brand name. The simple answer is: setting up own company will take a long time to acquire the customer’s, requires more efforts & patience, need to compete for the competitive website, and to execute logistic strategies.
If focusing on other factors then expert has other statistics regarding the Amazon acquisition of Souq. According to experts, Amazon analysis the Middle East market from a long time & extract out the key terms that will be beneficial after buying the Arab largest e-commerce store i.e. Souq.com
Now Amazon has the backup of 75,000 merchants with 2 million plus products to sell in 30+ categories. That will automate the need and requirement of the supply to perform the e-commerce operation.
The acquirement of Souq makes Amazon pass the legislation as all policies and terms were approved. If Amazon, set-up its own in the region than it has to pass the legislation and other terms & conditions to do business in the country. Here Amazon proudly says itself; proper logistics are the essential things that save Amazon.com from the hassle of trial and error.
Finally, Amazon is generating huge revenue with Souq that’s accessed extensively in the region.
How Amazon is using its New Company as Sale Channel?
After the acquisition of Souq.com, Amazon start implemented its strategies on its new company to make it their worth sale channel in the Arab world. In its own name-tag – the Amazon begins marketing its own products (Amazon Echo Dot, Amazon Tap, and Kindle Oasis) on its new company. There is a section on the navigation bar of Souq store i.e. Amazon Global Store where the company is marketing its own products in diverse categories.
From the reports, it has been revealing out that the Amazon is successfully generating the double the revenue via Souq in two years of acquisition. The merchants from all nearby countries are connecting to sell products in the Middle East. Over 4 million of products with 45 categories are available at the store.
Two years before, the recorded traffic on Souq store is 45 million per month and know it crossed 53 million. It’s a tremendous growth that reflects the logistics executed on the backend are much powerful. A large population is recorded from the UAE, Kuwait, and Saudi Arab who mostly turn down on the store during the sales like Black Friday, White Friday, Daily Souq deals, and discount offered on selected products.
One of the leading factors behind the success of the Amazon new sale channel is Sale & Discount offers on different categories throughout the year. To stable, the customer on the store for the long term the company introduces a separate section for Daily Deals where thousands of deals and offers are customized for the shoppers.
Today Amazon has a strong backbone in the Middle East with a huge back-up of 50 plus million consumers and for sure it’s planning to amaze the people with their upcoming projects