Dubai-based online retailer Souq.com confirmed on Monday fresh investment from South African media firm Naspers.
The announcement comes almost four weeks after Arabian Business exclusively revealed that Naspers was in talks to purchase a shareholding in Souq.com from parent company Al Jabbar Internet Group.
The value of the stake in Souq.com was not disclosed, although sources have told Arabian Business that it is about US$40m. If true, the deal would be the second largest investment made in an ecommerce and internet business in the Middle East since the 2009 sale of Arabic-language portal Maktoob.com for US$165m.
Aside from Jabbar, other investors in Souq.com, which has a customer base of around 3.5m people across the Gulf and North Africa, include Tiger Global. Jabbar’s other ecommerce brands include Sukar.com and Run2Sport.com.
The value of ecommerce related transactions in the Middle East is about US$11bn a year, according to Jawad Abassi, founder and general manager at Arab Advisors Group. Europe has the largest ecommerce market in the world, growing 19 percent last year with the total value of the market estimated at €246bn, according to figures from the European Multi-channel and Online Trade Association (EMOTA). The North American market is valued at €237bn.
Online retail sales now account for around 5.1 percent of the total value of the retail market in Europe, with 240m e-shoppers spending an average of €1,000 each, according to EMOTA.
Souq.com competes with Namshi, which was founded less than a year ago and sells shoes and clothing in the Middle East. Namshi secured US$20m in financing from JP Morgan Chase and Blakeney Management last month and is set to expand regionally.
By the end of 2011 there were more than 77.7m internet users in the Arab world, a penetration rate of around 22 percent, according to Abassi.