May, 2019     

UAE becomes Amazon marketplace: Will Saudi Arabia be next?


Souq has turned into Amazon in the UAE, but no timeline has been set on whether the same would happen in Saudi Arabia or for the other individual Middle East markets, but it will happen eventually, according to a top Amazon official.

“The UAE becomes the first to transition to the Amazon marketplace in the region, and the focus had been on achieving that in the most painless manner possible,” said Ronaldo Mouchawar, Vice-President of Amazon Mena and co-founder of Souq. “What this means is all our regional vendors can migrate to the global platform and with all the benefits that come with it.

“There was a fair bit of localisation — with the Arabic language, the addresses, delivery systems, and all the rest of it — that was part of the migration. That’s been achieved in the UAE. An existing consumer can log into souq.com and immediately be taken into the Amazon universe.”

In fact, for the first time ever on Amazon, Arabic has been introduced on both the mobile app and the website to cater to customers who prefer browsing and shopping in Arabic.

It was always the case that when Amazon bought Souq in mid-2017, the latter would lose its identity at some point and be known as Amazon. The only question was when, and two years later, it has become a reality. (The value of the purchase was just under $690 million.) According to advertising industry sources, this delivers a clear message to regional advertisers.

“Amazon in the US, the UK or Europe have clear guidelines on who can advertise on the platform,” said Satish Mayya, CEO of BPG Max, the media buying agency. “For instance, there is a requirement that anyone advertising had to be selling on the platform.

“But on Souq, anyone could advertise — that will become a lot more defined with the switch to Amazon.ae. Souq was already one of the most popular digital platforms in the region alongside Google and Facebook. Going as Amazon will make it even more compelling.

“Because on Google advertisers can only reach out to those who are searching. With Amazon, it becomes even more targeted because advertisers can direct messages at people who are actually making the purchase, not just search. Now, for advertisers and brands, it will be the sale that matters more than the search. That’s why advertising on amazon.ae will become a higher priority in the greater scheme of things.”

It’s a fact that any talk about digital advertising tends to revolve around Google (and YouTube, part of the same family), and Facebook (Instagram). But media buyers say that Amazon/Souq has been figuring quite prominently in recent campaigns, irrespective of whether the label is a popular one or still seeking an audience.

A lot could change for customers too. In recent weeks, if a customer in the UAE were searching for books or DVDs directly on amazon.co.uk, chances are that he would find that these were not being shipped to the UAE. In the past, there were hardly any such restrictions on the shipment of such products, with the latest DVD titles often being cheaper to source from there than buy here.

According to Mouchawar, more book titles — 15 million as per the last count — are available through on amazon.ae. “We are making the release cycles on the most popular items as narrow as possible between here and elsewhere. As for DVD titles, the shipment restrictions have to do with region-specific licensing than anything else.”

Now, if that leads shoppers here to come straight to amazon.ae for most of the purchases they used to make through sister sites, Amazon, for one, is not going to mind.

UAE customers get access to marketplace in US

  • According to estimates by Redseer consultancy, Amazon had almost 15 per cent plus of the online retail market in some parts of the Middle East even before entering the market through Souq.
  • Months after its Souq purchase, the local portal announced the launch of the “Amazon Global Store”, which allow customers in the UAE to shop for over one million products from Amazon in the US. Customers could pay in dirhams using their local credit cards or opt for cash-on-delivery.
  • How soon will Amazon make the transition to using its own name in Saudi Arabia? It needn’t be an easy one to make, with some Saudi shoppers targeting Souq in the recent past because of the Jeff Bezos’ association. Their ire against him stemmed from ownership of the “Washington Post”, which had been highly critical of some Saudi actions.