Amazon acquires SOUQ.com in order to establish a foothold in Middle East

Amazon.com, Inc., [stock_market_widget type=”inline” symbol=”AMZN” template=”chart” color=”default” refresh_frequency=”0″] one of the biggest and most well known online retailers out there is all set to carve out a niche for itself in the budding Middle Eastern online shopping scene. Amazon just closed a takeover deal with SOUQ.com, a Dubai based online retailer that serves many countries in the region. The deal had been in the works since last year when Amazon first started negotiations with the company. In early 2017 the negotiations fell apart, but Amazon again restarted bidding and the announcement regarding the takeover was announced today in a short statement.

“Amazon and Souq.com share the same DNA — we’re both driven by customers, invention and long-term thinking,” Amazon Senior Vice President Russ Grandinetti said in a statement.

The online shopping culture isn’t very prevalent in the Middle East yet as only 2% people shop online, but things can only get bigger and better at this point. In countries like Bahrain, Qatar and the United Arab Emirates, most people own mobile phones, so it is only a matter of time before online shopping picks up speed.

SOUQ.com launched in 2005 and is a well established ecommerce website with more than 3000 employees and a wide variety of products. It reportedly attracts over 45 million visitors in an average month. It was valued at $1 billion during its last funding attempt in 2016. Acquiring this company is a big step in Amazon’s overseas expansion mission. The US based company has already captured a lot of market share in India where it has pledged to spend $5 billion in the coming years.

Emaar Malls PJSC had a bid of 4800 million for SOUQ.com, but Amazon beat them and closed the deal. No details about price have been given out by Amazon or Souq.com, but experts with knowledge about the matter speculate that Amazon may have paid around $650 million for the acquisition. This is one of the largest acquisitions by Amazon after the 2014 acquisition of Twitch, a game streaming site for $970 million.