Amazon is all set to spread its wings this time and they are planning big with big money. The USA giant, after lots of hesitation bought souq.com and is making a name on Middle East and Africa too. After facing a tough competition from Indian e-commerce giant, Flipkart, a deal has been done under which, Flipkart opted out of the acquisition making room for Amazon.
Souq.com has around 8 million products at Inventory with which the company was valued at $1 billion. This pricing was crucial for Amazon and hence there was delaying in acquisition yet, in the end, after facing stiff competition, Amazon decided to acquire it and spread the tentacles.
None the less, it is evident that in the future, the growing Indian e-commerce companies such as Flipkart or Snapdeal will make a big impact since India is a key market.
Souq.com already has established a brand value and selling 75% of goods of the whole selling market in Middle East. Hence there were lots of speculations involved in this scenario. But after outbidding mall enterprise such as Majid Al Futtaim, Amazon went straight through acquisition.
After India, Middle East and Africa is perhaps the most lucrative market after USA. As the demand is growing up and up, the e-commerce industry is evolving and not only domestic companies but multinational companies are also intrigued and hence, acquisitions are happening more often than not.
With this acquisition, Amazon expects to build a strong hold in a region where, its presence wasn’t that much in focus. It gives access to warehouse and all logistic services to Amazon by which, it could maintain the prestige and can serve the clients more in a better manner.
It will, however, be one interesting to see how Amazon copes up in the Middle East.