|ARABIAN POST SPECIAL|By K Raveendran|
As predicted, Emaar chairman Mohammed Alabbar’s foray into e-commerce has already started creating waves in the regional and global online retailing market. In an apparent move to retain its clout, global e-commerce leader Amazon.com is reportedly in talks to acquire Dubai-based online retailer Souq.com.
Amazon is reportedly considering a bid for all of souq.com, which had initially planned to sell a minority stake. Bloomberg, which reported the Amazon bid, said however that final agreements have not been reached and negotiations could still falter.
Souq.com appointed Goldman Sachs Group Inc. to find buyers for 30 percent stake in the company. The company’s existing investors were also weighing selling their holdings, it was reported.
In February this year, Souq.com secured a funding of more than AED 1 billion ($ 275 million), the largest financing of an e-commerce business in the Middle East.
Investors in the latest round included New York-based Tiger Global Management and South Africa’s Naspers Ltd., both of which had invested in Souq.com in earlier funding rounds.
Souq.com also added new strategic investors to diversify its investor base, including Standard Chartered Private Equity, IFC (a member of the World Bank Group), Baillie Gifford, and many regional and tech-focused financial institutions.
The company, which claims to sell more than 1.5 million products online to customers in the United Arab Emirates, Egypt and Saudi Arabia, said the investment would support the company’s future growth, strengthen e-commerce in the region and empower more businesses to grow online through Souq.com’s platform.
When Mohammed Alabbar announced the launch of his new e-commerce venture Noon with an investment of $1 billion two weeks ago, it was forecast that the new company would be a game changer in the region’s online shopping experience. That the prophecy has come true is clear by the move by Amazon, which is seen as a bid to protect and expand its Middle East footprint.
While announcing the launch, Alabbar had claimed that his new company would be ‘nothing less than a quantum leap in retail in the region and the world.’ The new company was aiming to grow online sales in the region from 2 per cent of the total market (US$3 billion), to 15 per cent (US$70 billion) within a decade, he said.
Noon promised several firsts for the region, including the biggest selection of 20 million products covering fashion, books, home & garden, electronics, sports & outdoor, health & beauty, personal care, toys, kids and baby products.
It also promised same-day delivery through Noon Transportation, an in-house express delivery service; and NoonPay, a secure and innovative payment gateway.