Amazon’s Expansion in the Middle East

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The signs were there, back in 2017, when Amazon acquired the Dubai-based e-commerce giant Souq.com (the Middle Eastern equivalent of Amazon.com) for $580 million. It looked like Amazon was planning to expand.

Now, less than two years later, Amazon is confirming those earlier suspicions. They’re extending their international reach by opening a brand new marketplace: Amazon Middle East. Taking the lead in launching this new store is Amazon Web Services (AWS).

Starting early this year, the AWS Region team will build out the infrastructure needed to get Amazon up and running in Bahrain. By introducing these mega data centers and resources, Amazon is prepping to support a new wave of innovators, and the growth of new businesses.

What does this mean for third-party sellers?

Well, the most obvious benefit is that there is now one more marketplace to choose from, if you’re thinking about expanding globally.

Amazon is even encouraging some of the largest third-party sellers in North America to take a chance and head east. Whether they are providing any incentives to make that move, however, remains to be seen.

The expansion also means that sellers currently using the Souq e-commerce platform might not be able to do so when Amazon Middle East opens. In fact, Amazon is telling sellers to list on the new marketplace, rather than Souq.com. But whether or not Amazon will close Souq.com is still up in the air, as evidenced by the 52 full-time jobs listed on the site (as of 2/11/19).

Will the Amazon Middle East market be risky?

Potentially, yes, since a large majority of the Middle Eastern community doesn’t shop online. The in-person shopping experience offered at high-end malls and shopping centers is still highly valued, especially in the United Arab Emirates (UAE).

Additionally, many people associate Souq.com with counterfeit goods. Shoppers have been burned in the past and don’t trust the authenticity of products sold on the platform. Because of that, those same buyers might assume products listed on the new Amazon store are counterfeit as well.

But it’s extremely likely that a lot of consumers will still give Amazon Middle East a chance.

With Amazon’s commitment to protecting customers, and sellers on the new platform proving their professionalism and product quality, even the most skeptical buyers might change their minds about online shopping.

So, if you’re a current seller looking to expand internationally, look beyond your current product selection. Consider the customer base in the Middle East and the products they CAN’T access; that will be crucial to your success.

Don’t forget about the competition.

While Souq.com primarily services the UAE, Wadi.com focuses on the Saudi Arabian market. Before Amazon entered the picture, both platforms dominated the e-commerce market.

And Noon.com is yet another online giant. It’s still in its infancy, but it is one to watch.

So, as you can see, Amazon and Souq aren’t the only players in town. It will be interesting to see how Amazon stacks up against its competition. Will they be able to stand out?

Looking forward.

The upside is that the Middle East region’s e-commerce sector is growing faster than any other marketplace.

And despite the losses from its international operations last year, Amazon is still committed to expanding into new territories. During Amazon’s 4th quarter earnings report on January 31, they announced plans to continue investing in global marketplaces, throughout 2019 and beyond.

We’ll be keeping our eye on where they go next!

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14 coments on “Amazon’s Expansion in the Middle East

  1. Hi,

    I was a seller on Souq.com. Online sale in Middle east is relatively calm & people still like to go to shopping centers. One of the reason is fake products selling on souq as well as local market in UAE. Is there any news on market news on Middle east?

  2. Hello,
    so based on the new amazon marketplace in UAE, do jungle scout work on that market place? I mean if I bought jungle scout to use for only amazon.ae; does it work their normally or it will take time to be involved in this marketplace?
    Thank you

    1. Hi Sally,

      Currently, the Jungle Scout software is not supported on the Amazon UAE marketplace so if you purchase it, you won’t be able to select the marketplace from the Jungle Scout web application, or be able to run the Chrome extension while on Amazon.ae

      We will update you if our software expands to this marketplace.

  3. As per BMI research, Online shopping in the Middle East is rapidly evolving and has grown by 1500% over the last decade. With a dynamic young population and with one of the highest global per capita internet penetration levels the online spending potential is quickly emerging as one of the highest in the world. “In particular, the UAE and Saudi Arabia will remain the largest and fastest-growing e-commerce markets in the region. Amazon UAE needs no introduction. Anything one can imagine, almost everything under the sun is accessible in this online e-commerce platform. Amazon UAE brings the local know how’s of Souq and Amazon’s global retailing experience to allow customers to access new products from around the world every day and around 5 million products from Amazon US.

  4. Greetings Dear,
    My name is Zak; I am one of Souq.com (owned by Amazon recently) sellers. I have just started the account to sell in Middle east. I am planning to use JungleScout to look for a product. Would you please let me know your feedback regarding the below:
    1) Does is work for Souq.com platform?
    2) How much is it ? I am looking for cheapest package.
    3) Does it expired?
    4) What is your recommendation for beginners?

    Please, let me know once you have a chance.
    Regards,

    1. Hi Zak,

      Right now, our product research tools are not compatible with the UAE marketplace. So you won’t be able to use for Souq.com or amazon.ae just yet. If we do expand our products we will announce it here!

  5. Hi Melissa and Dave, Thanks for the article. I have a seller account on Amazon.ae , and I wanna know if you offer market research to Amazon.ae before I sign up for an account on JungleScout with a payment plan.

    1. Hi!
      Right now, our product research tools are not compatible with the UAE marketplace. But if you’re considering expanding your business globally, there are 9 other Amazon marketplaces where you can utilize Jungle Scout. You can always reach out to [email protected] with any further questions!

      Melissa

  6. Hi Melissa and Dave, Thanks for the article and it will be great to know ahead of time when you guys will be providing data for this market? this will be very very helpful.

    I’m looking forward to this.

    1. Hi Hatim,

      We tend to go wherever Amazon goes, so we will update you when we know more! 😉

      Melissa

  7. Good article,
    are you offering market research to Amazon.ae?
    As I am living in Dubai and interesting in selling in Amazon. ae

  8. Amazon acquiring the market place Souq to it continues changes and the work that it has done on the site shows that it is very much dedicated to go into the people with the same brand name Souq but now as Amazon rebranded Souq to Amazon AE it is quite surprised everyone in the market. Though the plans of Amazon are not revealed, it is expected that they have major plans behind it.​

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