Ronaldo Mouchawar, the CEO and co-founder of UAE-based e-commerce site Souq.com is eyeing the next phase of the company’s expansion following the announcement of its acquisition by US giant Amazon.
Speaking to Gulf Business, Mouchawar declined to give price details of the deal, which is estimated to be worth $580m to $750m, but said it included Souq’s payment, logistics and aftersales businesses and was motivated by the need to meet a “massive uptake” in the regional e-commerce market in the next three years.
The CEO, who has built the firm over the last 12 years, will stay on in his current role to lead Amazon’s e-commerce business in the Middle East when the deal closes within the “next few weeks”.
Among the initial changes he believes will come from the deal is a substantial increase in the number of products Souq offers through tapping Amazon’s global marketplace.
“They are the best partner because they facilitate our next phase of growth and they can also add value to the business by us having access to the global supply and products that Amazon carries,” he said.
“There is also the logistics and infrastructure that we can tap into, as well as giving our seller a better global selling platform.”
However, plans regarding other areas like the introduction of Amazon’s drone delivery platform in the region have yet to be discussed.
He also said it was still too early for a decision on whether the Souq.com brand would remain in the region or Amazon would introduce its own.
But one key message was that the company would not seek to rapidly expand its footprint with the new backing due to untapped potential in existing markets.
“We love that story but, to be honest with you, I also feel there is so much to do in the current markets we’re in. Still online as a percentage of offline we’re not where we want to be. We do see the growth coming and we’re now with this partnership ready for it and we’ll take it one step at a time.”
Souq currently offers 8.4 million products after recently expanding into books and groceries and operates directly in the UAE, Egypt, Saudi and Kuwait, with shipping also available to Oman, Bahrain and Qatar.
Mouchawar also spoke of the launch of regional rival noon.com, a $1bn venture backed by Emirati billionaire Mohamed Alabbar and the Saudi Public Investment Fund, which failed to meet its January launch date.
Alabbar was reported to be among the bidders for Souq and the malls unit of the real estate firm he chairs, Emaar, put in a late $800m bid earlier this week.
“This is a technology driven, innovation driven market and you need to build that DNA within your team, it takes some time,” he said. “But there is always room for other winners as well.”