Souq also has a subsidiary named Helpbit, that provides repair and help services. Third-party sellers can open stores directly, thus attracting a lot of Chinese sellers. Negotiation talks between Amazon and Souq were not straightforward and they went on for several months before the acquisition eventually took place. The Chinese cross-border ecommerce platform JollyChic, which was still quite low-key, made Souq see a huge gap especially in the field of operations and supply chain.
You could feel the urgency of Souq wanting to sell. Since then, Souq has been gradually absorbed into the Amazon galaxy. Before Souq was acquired, Yahoo was the only internet giant that paid attention to this region. Well, if you do not factor in the limited presence of AliExpress, part of Alibaba Group. Moreover, numbers also show that the startup landscape in the MENA region is still in its early stages.
Souq was able to exit because of the foundation Maktoob had already laid. However, the final valuation came at a heavy discounted, and not all the shareholders were happy. A big question that looms over the minds of investors and entrepreneurs is— is there enough room in the market to cultivate healthy unicorns?
On one hand, GCC countries such as Saudi Arabia and UAE have a high average basket size, but the population is small with various groups competing for the same consumer base; on the other hand, Egypt, Turkey and other populous countries have extremely high risks and uncertainties. Got a different perspective or have a burning opinion to share? Let us know at hello mworks.
Friday, November 12, The Low Down — Momentum Works. Not true! China suddenly allows off-campus tutoring again, after months of crackdown? A complete list of how merchants can work with Meituan.
To tackle climate change, bold technology is better than pledges. Home Industry Ecommerce Souq. Although Maktoob was ideal for helping individuals connect, we concluded after a few projects that we should create a separate commerce-only website. Users who came to Maktoob typically wanted to communicate or get information. They rarely came to buy.
The few who did purchase products came expressly to do that. So we decided that our commerce site should have its own brand and identity. In I bought the Souq. The UAE had a growing number of young, tech-savvy consumers and presented relatively few logistical challenges, owing to its well-functioning transport infrastructure. We launched Souq.
The website took off almost at once, and we expanded our operations into Saudi Arabia. But it quickly became apparent that our growth prospects were limited. To begin with, the increasing adoption of smartphones in the region meant that more and more of our customers were going online with their mobile devices instead of their laptops. We would have to make Souq an app business rather than just a website. The importance of mobility seems obvious now, but back in shopping on a mobile phone was still a new concept, even in developed economies, where consumers had grown up around desktops and laptops.
We launched our first app in But the really big opportunity, as we had seen with the growth of Amazon in the United States, lay less in bringing together individual buyers and sellers than in linking customers with retail merchants. Our future was in B2C. Moreover, it was a challenge to move our merchants and customers from a site on which they could list products pretty much as they liked to a site where goods are categorized by half a million or more SKUs. We went live in May , initially in Egypt and quickly after that in other geographies.
The risk and our efforts paid off, and although we lost most of our transaction volume almost overnight when we closed down the auction site, we more than made up for it within six months and started doubling our revenue every quarter.
Of course, the switch was not without its challenges. We started with small businesses, which had the most to gain from e-commerce, pounding the pavement shop by shop. We soon realized that offering them access to customers was not enough; we would have to help them with payment and delivery. Our success in facing those challenges is central to the Souq story. As we were launching our revamped e-commerce site in the UAE, I got a call from one of the merchants using Souq. That struck me as odd—I was living in the office with my team and working day and night to make the transition happen.
So I invited him to come and meet with us. However, about a year ago, I started importing watches and selling them on Souq, and it has been so successful that I have given up petroleum engineering. So I need to know that you guys are going to stick around and make this relaunch work.
Of course, enabling other businesses is what a marketplace does—and this engineer is only one of many people who have made themselves into independent traders on our site.
But it is humbling to be so directly confronted by the human consequences of your business decisions. Payment was not a big problem in the UAE. Credit cards were widely available and could be used online, so all we needed was the functionality to take online payments. However, to expand to other countries in the region, we would have to enable alternative payment methods, including cash on delivery. In Saudi Arabia, which is now one of our biggest geographies, credit card use online was not widespread; although the use of credit cards that charge interest is now sharia-compliant, customers still prefer to pay cash.
In Egypt, another large opportunity, few people can meet the deposit requirements to get a card. It also comes with the same seller back-end system used in the U. In the letter announcing the launch, Souq's cofounder Ronaldo Mouchawar wrote that Amazon's new Middle East service will sell over 30 million products, "including those available on Souq and five million products from Amazon US. Correction: Updates have been made throughout this report to reflect that Souq. Skip Navigation.
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