Amazon looks to nook Middle East e-commerce marketplace

E-commerce behemoth Amazon is preparing to launch a brand new Middle East website to increase its business within the place. Already the sector’s largest net purchasing platform, the business enterprise has its eye, especially on the United Arab Emirates’ lucrative market.

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Two years ago, Amazon purchased Dubai-based totally online store Souq.Com for $580 million. Until now Amazon relied on the acquisition—an English-Arabic language e-commerce platform geared to neighborhood customers—to promote products and services in the region.

However, analysts consider the tech large is slowly looking to shift visitors onto its personal internet site, as a way to help US-based sellers increase, even as phasing out Souq.Com. The new online website might reportedly resemble the Amazon UK or Amazon Germany ones.
“Amazon has completed very little with Souq.Com to this point due to the fact the latter is already a nicely-hooked up brand with a superb seller and consumer base. So the enterprise has not wanted an awful lot tinkering with so far,” says Andrew Kitson, Head of Telecoms, Media and Technology Industry Research at London-based Fitch Solutions.

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“But we have seen an accelerated use of Amazon in web seek visitors and e-trade. The corporation can be feeling that the time is proper to dial down the Souq.Com brand and produce Amazon extra to the fore.”

With its new challenge, Amazon is the use of the UAE and Saudi Arabia as a springboard into the relaxation of the area, Kitson explained. It will also seek to make bigger its IT, web services and cloud computing sectors which entails putting in place statistics facilities and working with local internet and telecom provider vendors.

“So if they may be going in with the Amazon brand on that facet, it takes the experience to push the Amazon logo on the customer facet as nicely,” he stated.

Products which have completed nicely in Dubai’s thriving e-commerce market include earrings, clothing, footwear, apparel, make-up, and electronics. Amazon will search for to copy those successes all through the place.

“The food sector is much less success as buyers have a tendency to be historically minded, preferring to keep locally,” Kitson concluded.

Amazon’s ambition for the region has additionally sparked competitors. Dubai actual property magnate Mohamed Alabbar recently launched Noon.Com with the assist of government budget and private Gulf traders. The employer is already constructing distribution facilities in Saudi Arabia (in Riyadh and Jeddah) and a huge warehouse in Dubai.

“We anticipate to emerge as a global participant but will listen first of all on Saudi Arabia and the United Arab Emirates,” Alabbar these days stated of his employer.

Matthew Reed, a Dubai-based totally analyst for Ovum, a technology consultancy company, said that Noon.Com changed into setting up approximately 18 months ago. “Despite its grand plans whilst it became unveiled, the launch was not on time by way of pretty a long term and there have been reported quite a variety of operational problems.”

The Middle East e-commerce marketplace is still pretty underdeveloped so there is good potential for boom and for a global participant like Amazon to steer, he said.
Turning to Amazon’s acquisition of Souq.Com, Reed brought that there is still speculation as to the plan of phasing it out.

“It will be that Amazon has calculated that the use of its personal emblem is probably more powerful and possibly also that using its own tech systems will allow it to extend and provide services that perhaps it can’t thru Souq.Com,” he said.

“That might be giant for the Middle East e-commerce market, however, Amazon would possibly face challenges which will be political as plenty as a business. A while in the past Alabbar stated global giants like Amazon have been a danger to neighborhood agencies.”

There become additionally a marketing campaign in Saudi Arabia to boycott Amazon because of CEO Jeff Bezos’ buy of The Washington Post for which murdered Saudi journalist Jamal Khashoggi served as a contributing columnist.

“But it’s miles unclear if this marketing campaign had any impact,” Reed stated.