E-commerce customers in the GCC will soon have greater product choice, with Amazon prioritising the expansion of souq.com’s offering after buying the platform in May.
Souq.com co-founder and CEO Ronaldo Mouchawar said the entrance of the world’s largest online retailer into the region was “a big opportunity to increase product selection for customers”.
Specifically, big international brands that had previously been reluctant to sell online in the GCC would be attracted to the new souq.com, he said.
“It’s a big focus for us. We’ve seen in the past that some customers tend to buy products internationally because they’re not available in the region and we want to make sure we address that,” Mouchawar told Arabian Business.
“We feel choice is a big customer value proposition. We want to make sure customers do have the choice. But also ensure that delivery and the experience is superior and well managed."
Souq.com has always prided itself on the fact it offers a platform for local traders and Mouchawar denies that the influx of international brands will make it more difficult for them to compete.
“Customers should always have the choice. Especially on mobile - where more of our customers are - they are empowered to choose. Some local products will be available super fast to customers, maybe in a day or two, and some products [from abroad] won’t be available immediately ... and customers will make a choice.
“We are a marketplace as a site and we allow and want and do partner with many brands and merchants and retailers and entrepreneurs to sell on our site, so that model won’t change, we’re just opening it up to more internationals.”
Souq.com’s current offering of 8.4 million products is less than half of the 20 million being promised by noon.com, a $1bn e-commerce platform under construction by mall developer Mohamed Alabbar and Saudi Arabia’s sovereign wealth fund.
The site has been delayed since January and Mouchawar is reluctant to comment on the potential competition.
“We don’t know noon.com’s strategy. We solely focus on our strategy. Once it is out we’ll look at it,” he said.
“You always have multiple players in every category. The ones that grow are the ones that focus and serve the customers. This is what Amazon has done over the years; they’re known as one of the most customers focused companies in the world.”
Any newcomers to the GCC e-commerce sector are unlikely to unseat souq.com anytime soon. While market share may be up for grabs, the sheer organic growth of online retail – which currently accounts for a paltry 2 percent of total retail in the Middle East - all but guarantees revenue growth.
“The potential in this region is massive,” Mouchawar said. “Online will continue to grow and now with Amazon and the know-how and technology and product selection that Amazon brings, and its focus on … consumers in the region, I think it’s really a good time for everyone.
“This investment will attract more investment into the sector - from current retailers that are trying to do online channels to global retailers - in this region.”
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