Amazon this week launched a marketplace in the Middle East, rebranding the popular Souq e-commerce site that it acquired two years ago. Visitors to Souq.com are now automatically redirected to Amazon.ae.
Souq customers can access their existing orders and account information on Amazon.ae and the Amazon.ae app, and Amazon is taking care of warranty claims, according to the Amazon.ae website. Customers also can pay in local currency using local and international credit cards or cash on delivery (COD).
For the first time at Amazon, Arabic language can be used on the app and the website, the e-commerce giant also said.
Amazon's newest marketplace is based in the United Arab Emirates but has enjoyed popularity throughout the Middle East as Souq.
Egypt provided the greatest amount of traffic to Souq.com at 38.1% over the past year, followed by the United Arab Emirates at 27.1% and Saudi Arabia at 22.5%, according to digital intelligence firm SimilarWeb. As of March this year, Souq.com had 73.4% share of the shopping category in Egypt, and 49% in the United Arab Emirates, according to SimilarWeb research emailed to Retail Dive.
The region is home to not only a significant wealthy class but also a rising middle class, making it an increasingly important market for many global brands, especially at a time when China's growth is slowing. Last month, in fact, Amazon said it's shuttering its China marketplace to focus on cross-border sales to Chinese consumers.
Like India, the Middle East also includes many areas with young, educated and mobile-first populations, with an open mind toward e-commerce. Along with growing digital operations aimed at those shoppers, brands are also catering to the unique tastes and needs of the region: Nike last year developed a performance hijab for Muslim women athletes, for example.
Souq has grown since its acquisition by Amazon. Over the past 12 months (April last year to March this year), Souq.com averaged 51.95 million global monthly visits, split by 48.3% desktop and 51.7% mobile, according to SimilarWeb. That shift to mobile is noteworthy compared with 2017, when 68% of visits were driven by desktop, according to the research. Average monthly visits rose 9% from the previous 12 months to 47.64 million global monthly visits, SimilarWeb said.
As popular as Souq has been, though, the changeover to Amazon is poised to bolster the site, according to SimilarWeb Marketing Communications Manager Yoav Reisler. "It will be interesting to see how the new domain affects web traffic, but if I had to guess, it would only be beneficial to have the Amazon name now attached to it," he told Retail Dive in an email.
In fact, Amazon is protecting its international growth potential by expanding its own brand globally, according to Pete Killian, partner at growth strategy firm Vivaldi. "Amazon is all about scale, and understands the economic leverage for its business from investing behind one brand," he told Retail Dive in an email. "They also understand the negative dilutive potential of investing in multiple brands globally, especially online brands where shoppers are less loyal: competing against yourself in your portfolio, fragmenting your shopper base, confusing your brand’s identity, and limiting your value proposition in a market (i.e. 'Amazon' now stands for far more than e-commerce)."
Souq, Arabic for "market," is also a fairly generic name that doesn't adequately telegraph Amazon's complete offer, he said. "'Souq' under-sells Amazon’s proposition, because Amazon sells a lot beyond what you would find at an actual souq," he said.
That doesn't extend to Whole Foods in the U.S., however, where a similar name change "would destroy billions in value," according to Killian. The name "Whole Foods" offers marketing benefits that Amazon lacks, among what Killian calls "a very attractive consumer segment."
"For affluent foodies Whole Foods means highest quality, an immersive exploratory shopping experience, and curated new/unique products," he said. "Very different if not the opposite of Amazon’s convenient delivery, infinite selection, and competitive prices. Amazon wants to win in food, with a profitable consumer, and needs to own Whole Foods-type benefits to do it, and that won’t happen overnight."