Now that it’s selling just about everything in the world (from Fiat Chryslers to its own fashion brand), it wants to be everywhere in the world, too. As per a new report from Bloomberg, Amazon is in negotiations to acquired Souq.com FZ, a Dubai-based ecommerce giant. This would allow for the Seattle-based online marketplace to establish “a footprint in the high-growth Middle East market,” Bloomberg’s sources noted. And it will set the company back around $1 billion.
While Souq.com reportedly wanted to sell just a stake in the company (starting at around 30 percent), those familiar with the proceedings told Bloomberg that Amazon is now looking into buying the entire site. That said, nothing has yet been finalized, and there remains a chance that the negotiations could fall through. Neither Souq.com nor Amazon have responded to interview requests or further questions.
Currently, Souq.com has an online trove of more than 1.5 million products for its customers to peruse and purchase, and it rather recently obtained $275 million in funding. At that point, Souq.com’s Chief Executive Office Ronaldo Mouchawar noted that the company might be looking into an initial public offering in the future, though those plans would seem to have changed, should the rumors regarding Amazon’s buyout be true.
The move would certainly help Jeff Bezos and his company establish a presence in key and emerging markets like Egypt, Saudi Arabia, and the UAE. But there are challenges to overcome in these countries — for example, because consumers in the Middle East don’t always have credit cards on hand, many of their online purchases must be made using prepaid cards sold at physical stores. And whereas Amazon has warehouses all across the U.S. that make for easy two-day delivery, the same isn’t true in that region of the world.
All the same, we’ll just have to wait and see whether Souq.com becomes the latest member of the burgeoning Amazon family.
