DUBAI: Amazon’s acquisition of online retail site Souq.com marks a “coming-of-age” of the Middle East ecommerce sector, technology experts said.
Souq plans to expand its workforce and operations after the US market leader clinched a deal to buy 100 percent of the Middle East player, executives from both firms said.
Amazon had walked away from talks with Souq.com earlier this year, but it reportedly came back with an offer of $650 million.
Amazon and Souq.com said earlier on Tuesday they had agreed on the takeover, despite an eleventh-hour bid by Dubai billionaire Mohamed Alabbar’s Emaar Malls to cut in with an offer it said was worth $800 million.
Executives have not disclosed the value of the Amazon deal, which adviser Goldman Sachs called “the biggest-ever technology M&A transaction in the Arab world.”
Sources with knowledge of the takeover said Amazon was paying less than Emaar’s offer, making it lower than Souq.com’s $1 billion valuation when it sought funding last year.
One source said Souq.com would have broken an exclusivity agreement with Amazon if it accepted Emaar’s bid at this stage.
“Amazon is a great fit with us. We have a lot of common values and it is all about innovation, technology and the type of customer experience and thinking that Amazon has,” Souq.com Co-Founder and Chief Executive Ronaldo Mouchawar told Reuters.
Technology expert Matthew Reed, practice leader for the Middle East and Africa at Ovum in Dubai, said that the deal was significant.
“The Amazon deal to buy Souq.com marks a coming-of-age moment for e-commerce in the Middle East,” Reed told Arab News.
“Currently, e-commerce in the region is less advanced than might be expected the given the relative affluence and high levels of broadband connectivity in the GCC states. But the arrival in the region of a global leader such as Amazon should help to develop and grow the e-commerce sector here.”
The deal will help grow an already major player in the Middle East online retail sector. Alabbar himself has advanced plans for the launch of Noon, slated as a $1 billion portal that will have a big initial focus on fashion and luxury products.
“Assuming the deal goes ahead, Noon will face tougher competition than it might have been expecting, as in Amazon it will be up against what many see as the world’s leading e-tailer,” Reed said.
P.K. Gulati, a Dubai-based technology investor, said that the Amazon-Souq deal was “awesome”.
“I think it’s great for the ecosystem — it’s great as a role-model deal, in the sense of people thinking that they can do it,” Gulati – who has made about 15 investments worldwide, mainly in Silicon Valley and India – told Arab News.
It was also remarkable given Amazon’s track record in business, he added. “Amazon has a reputation of not buying companies — rather, of making them.”
Gulati said that Alabbar’s unsuccessful 11th-hour bid for Souq simply came too late.
“Putting a counter-bid on a Friday was in my opinion probably too late… I think the deal was already done already by then.”
Noon may become a future player in the space, but such sites typically take some time to take off, Gulati added. It typically “takes three to five years for a platform to stabilize and become something which people like,” he said.
Souq.com, founded in 2005, stocks 8.5 million items on its website and generates about 50 million monthly visits, the site’s CEO Mouchawar told Reuters. It delivers to the six Gulf Arab states and Egypt.
Mouchawar said there was scope to expand the business with Amazon and to increase the 3,000-strong workforce to boost Souq.com’s reach, without saying by how many it would rise.
“We will continue to invest in our segment and grow our markets,” he said at Souq.com’s Dubai headquarters.
Despite its young, tech-savvy population, shoppers in the Middle East still prefer to shop in stores. Online retail accounts for less than 1 percent of total sales in the Middle East, according to market researcher Euromonitor International.
“We want to figure out how to grow the team here. If we’re going to grow the business we have to grow logistics, we have to grow technical development,” Amazon Senior Vice President Russ Grandinetti said.
In a deal document seen by Reuters, Goldman said the acquisition would accelerate Amazon’s entry into “attractive Middle East countries with significant growth potential.”
After the Amazon takeover, Middle East consumers will be able to buy products available on Amazon.com through Souq.com, and Middle East merchants will have access to a wider market via Amazon’s network.
The acquisition is expected to close later this year.
Souq.com’s current shareholders include South Africa’s Naspers Ltd. and Tiger Global Management.
The Amazon deal was backed by the Dubai government, which wants to use technology to expand its regional retail footprint.
Dubai’s Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum said in a statement it showed the city state’s position “as a regional and global hub for the world’s biggest and leading organizations.”
Amazon’s acquisition of Souq.com is seen as significant for the Middle East’s nascent tech sector.
“This is effectively a vote of confidence in the region. You have a major American company going into a digital company in the region,” said Fadi Ghandour, founder Dubai-listed logistics firm Aramex and a prominent venture capitalist in the Middle East.
— With Reuters
Amazon deal to buy Souq.com a ‘coming-of-age’ of Mideast ecommerce
Amazon deal to buy Souq.com a ‘coming-of-age’ of Mideast ecommerce
Reactions to the crash of the Iranian president’s helicopter
- Iraqi government said it instructed relevant bodies to offer help to neighboring Iran in the search mission
LONDON: Following are reactions from foreign governments and officials to the news that a helicopter carrying Iranian President Ebrahim Raisi and his foreign minister crashed as it flew over mountain terrain in heavy fog on Sunday.
US STATE DEPARTMENT
“We are closely following reports of a possible hard landing of a helicopter in Iran carrying the Iranian president and foreign minister,” a State Department spokesperson said in a statement.
US PRESIDENT JOE BIDEN
A spokesperson for President Biden, Karine Jean-Pierre, told reporters aboard Air Force One that the president had been briefed on the situation. She did not elaborate.
AZERI PRESIDENT ILHAM ALIYEV (Raisi was returning from Iran’s border with Azerbaijan when his helicopter crashed).
“Today, after bidding a friendly farewell to the (visiting) President of the Islamic Republic of Iran, Ebrahim Raisi, we were profoundly troubled by the news of a helicopter carrying the top delegation crash-landing in Iran.”
“Our prayers to Allah Almighty are with President Ebrahim Raisi and the accompanying delegation. As a neighbor, friend, and brotherly country, the Republic of Azerbaijan stands ready to offer any assistance needed.”
IRAQI GOVERNMENT
The Iraqi government said in a statement it had instructed its interior ministry, the Red Crescent and other relevant bodies to offer help to neighboring Iran in the search mission.
UAE food aid shipment arrives in Gaza
- Shipment arrived via the maritime corridor from Larnaca in Cyprus
DUBAI: A UAE aid shipment carrying 252 tons of food arrived in Gaza bound for the north of the enclave, Emirates News Agency reported on Sunday.
The shipment arrived via the maritime corridor from Larnaca in Cyprus. The delivery involved cooperation from the US, Cyprus, UK, EU and UN.
The supplies were unloaded at UN warehouses in Deir Al-Balah and are awaiting distribution to Palestinians in need.
Emirati Minister of State for International Cooperation Reem Al-Hashimy said that the food supplies will be delivered and distributed in collaboration with international partners and humanitarian organizations, as part of the UAE’s efforts to provide relief and address the humanitarian crisis in the Gaza Strip.
The UAE, in accordance with its historical commitment to the Palestinian people and under the guidance of its leadership, continues to provide urgent humanitarian aid and supplies to Gaza, she added.
Since the war began in October, the UAE has delivered more than 32,000 tons of urgent humanitarian supplies, including food, relief and medical supplies, via 260 flights, 49 airdrops and 1,243 trucks.
The UAE delivery came as Israel closed the Rafah border crossing. The World Health Organization said on Friday that it has received no medical supplies in the Gaza Strip for 10 days.
Helicopter carrying Iran's President Raisi makes rough landing, Iranian media say
- IRNA said the helicopter in question had been carrying Raisi, Foreign Minister Hossein Amirabdollahian and local officials
DUBAI: A helicopter carrying Iranian President Ebrahim Raisi and his foreign minister made a rough landing on Sunday as it was crossing a mountainous area in heavy fog on the way back from a visit to Azerbaijan, Iranian news agencies said.
The bad weather was complicating rescue efforts, the state news agency IRNA reported. The semi-official Fars news agency urged Iranians to pray for Raisi and state TV carried prayers for his safety.
IRNA said the helicopter in question had been carrying Raisi, Foreign Minister Hossein Amirabdollahian and local officials.
Interior Minister Ahmed Vahidi told state TV only that one of the helicopters in a group of three had come down hard, and that authorities were awaiting further details.
Raisi, 63, was elected president at the second attempt in 2021, and since taking office has ordered a tightening of morality laws, overseen a bloody crackdown on anti-government protests and pushed hard in nuclear talks with world powers.
In Iran’s dual political system, split between the clerical establishment and the government, it is the supreme leader rather than the president who has the final say on all major policies.
But many see Raisi as a strong contender to succeed his mentor, Supreme Leader Ayatollah Ali Khamenei, who has strongly endorsed Raisi's main policies.
Israel war cabinet minister says to quit unless Gaza plan approved
- Israeli PM Benjamin Netanyahu dismisses comments as "washed-up words"
- Broad splits emerge in Israeli war cabinet as Hamas regroups in northern Gaza
JERUSALEM: Israeli war cabinet minister Benny Gantz said Saturday he would resign from the body unless Prime Minister Benjamin Netanyahu approved a post-war plan for the Gaza Strip.
“The war cabinet must formulate and approve by June 8 an action plan that will lead to the realization of six strategic goals of national importance.. (or) we will be forced to resign from the government,” Gantz said, referring to his party, in a televised address directed at Netanyahu.
Gantz said the six goals included toppling Hamas, ensuring Israeli security control over the Palestinian territory and returning Israeli hostages.
“Along with maintaining Israeli security control, establish an American, European, Arab and Palestinian administration that will manage civilian affairs in the Gaza Strip and lay the foundation for a future alternative that is not Hamas or (Mahmud) Abbas,” he said, referring to the president of the Palestinian Authority.
He also urged the normalization of ties with Saudi Arabia “as part of an overall move that will create an alliance with the free world and the Arab world against Iran and its affiliates.”
Netanyahu responded to Gantz’s threat on Saturday by slamming the minister’s demands as “washed-up words whose meaning is clear: the end of the war and a defeat for Israel, the abandoning of most of the hostages, leaving Hamas intact and the establishment of a Palestinian state.”
The Israeli army has been battling Hamas militants across the Gaza Strip for more than seven months.
But broad splits have emerged in the Israeli war cabinet in recent days after Hamas fighters regrouped in northern Gaza, an area where Israel previously said the group had been neutralized.
Netanyahu came under personal attack from Defense Minister Yoav Gallant on Wednesday for failing to rule out an Israeli government in Gaza after the war.
The Gaza war broke out after Hamas’s attack on October 7 on southern Israel which resulted in the deaths of more than 1,170 people, mostly civilians, according to an AFP tally of Israeli official figures.
The militants also seized about 250 hostages, 124 of whom Israel estimates remain in Gaza, including 37 the military says are dead.
Israel’s military retaliation against Hamas has killed at least 35,386 people, mostly civilians, according to the Hamas-run Gaza’s health ministry, and an Israeli siege has brought dire food shortages and the threat of famine.
US, Iranian officials met in Oman after Israel escalation
- Washington called on Tehran to rein in proxy forces
- Officials sat in separate rooms with Omani intermediaries passing messages
LONDON: US and Iranian officials held talks in Oman last week aimed at reducing regional tensions, the New York Times reported.
Through intermediaries from Oman, Washington’s top Middle East official Brett McGurk and the deputy special envoy for Iran, Abram Paley, spoke with Iranian counterparts.
It was the first contact between the two countries in the wake of Iran’s retaliatory missile and drone attack on Israel in April.
The US officials, who communicated with their Iranian counterparts in a separate room — with Omani officials passing on messages — requested that Tehran rein in its proxy forces across the region.
The US has had no diplomatic contact with Iran since 1979, and communicates with the country using intermediaries and back channels.
Since the outbreak of the Gaza war last October, Iran-backed militias — including Hezbollah in Lebanon, the Houthis in Yemen, and armed groups in Syria and Iraq — have ramped up attacks on Israeli and American targets.
But US officials have determined that neither Hezbollah nor Iran want an escalation and wider war.
After Israel struck Iran’s consulate in Damascus at the beginning of April, Tehran retaliated with hundreds of ballistic missiles and drones.
The attack — which was intercepted by air defense systems from Israel, the US and the UK, among others — was the first ever direct Iranian strike on Israel, which has for years targeted Iranian assets in Syria, whose government is a close ally of Tehran.
National Security Adviser Jake Sullivan said in a news conference this week that the “Iranian threat” to Israel and US interests “is clear.”
He added: “We are working with Israel and other partners to protect against these threats and to prevent escalation into an all-out regional war through a calibrated combination of diplomacy, deterrence, force posture adjustments and use of force when necessary to protect our people and to defend our interests and our allies.”
