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Sun 9 Apr 2017 10:30 AM

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Amazon hunts for office, logistics space in Dubai

E-commerce giant ramps up search following acquisition of UAE’s Souq.com

Amazon hunts for office, logistics space in Dubai
(LEON NEAL/AFP/Getty Images)

Amazon is understood to have started a search for its first office in Dubai, as well as logistics space to run its expanding Middle East operations.

The retail giant, which acquired UAE e-commerce website Souq.com for an undisclosed sum in March, does not currently have a permanent base in the country.

Its Middle East e-commerce operations are limited to Saudi Arabia – although its cloud computing arm, Amazon Web Services, has offices in Dubai and Bahrain.

Arabian Business understands that since January, Amazon has had a team of around five people on the ground in Dubai tasked with finding office and logistics space from which to run the company’s regional operations.

Amazon is understood to have met with the relevant authorities and advisors and to have ramped up its search since the acquisition of Souq.com.

It is understood the company has also begun recruitment activity outside the UAE, to bring new staff to a UAE office. Some are already preparing to move to the country in the coming months, sources said.

It is not known how big the office and the logistics warehouse will be, nor where the buildings will be located.

However, sources said the company is unlikely to be restricted to free zone areas as the government would consider granting it special onshore privileges like it did for technology giant Apple, with its standalone stores in Mall of Emirates and other prime locations.

It is understood that Amazon could deploy a ‘build-to-suit’ model if it fails to find available space to suit its requirements – that is, to construct its own building from scratch.

If Amazon seeks a retail presence like Apple in future, sources said this is likely to take the form of ‘shopfront’ stores like those of UK retailer Argos, which has a relatively small front-of-house space where customers choose what they want to buy from Argos catalogues, and the stock is kept in a warehouse at the back.

Amazon has not provided details of its Middle East e-commerce strategy following its acquisition of Souq.com for a price thought to be around $650 million, and it declined to comment on the latest news when approached by Arabian Business.

All other parties declined to comment.

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