By Staff writer
E-commerce business is now reportedly seeking other potential investors, in talks with mall operator Majid Al Futtaim
Amazon.com and India’s Flipkart Online Services have reportedly walked away from talks to buy Dubai-based Souq.com after disagreeing over price.
Bloomberg reported on Wednesday that the e-commerce business is now seeking other potential investors and is negotiating with mall operator Majid Al Futtaim, citing people familiar with the matter.
It was reported in November that US giant Amazon.com was in talks to acquire Souq.com for about $1 billion to give it a footprint in the high-growth Middle East market.
Amazon was reportedly considering a bid for all of the site, which had initially planned to sell a stake of at least 30 percent.
Bloomberg said a spokesman for Majid Al Futtaim declined to comment, while Amazon and Flipkart didn’t immediately return requests for comment and Souq.com wasn’t immediately available to comment.
In September, Souq.com, the largest online retailer in the Middle East, was planning to sell a stake of 30 percent and had appointed advisers at Goldman Sachs Group to find buyers for the stake.
In February, Souq.com announced it had completed a funding round of more than AED1 billion ($275 million), the largest financing of an e-commerce business in the region.
Established in 2005, Souq.com sells more than 400,000 products online to customers in the UAE, Egypt, Kuwait and Saudi Arabia.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Souq's value collapsed as soon as the Noon announcement was made. It's been clear for a while that one of Souq's main investors, Tiger Global, was keen to exit the company - hence all the news reports re Amazon and so on. The truth is the valuation of that stake was too high, and Tiger should have got out sooner. This is no reflection on the strength or otherwise of Noon (it hasn't even launched yet) but it is going to be considerably larger and has quasi-government backing. Souq will have to concentrate on improving its customer service (as other commentators have stated) and on living in a far more competitive environment.
Not surprising to begin with and the pricing issue is just an excuse, Amazon is one of the foremost e-commerce vendors in the world with a great brand name being an American company with superb services, Souq on the other hand....nuff said!
Marriage made in hell and the verdict is out.