CNBC: Amazon planning Middle East expansion
UPDATE: February 1, 2019: On Thursday, an Amazon spokesperson told Retail Dive in an email, "Please note that we have no comment on the below, as we do not comment on rumors or speculation."
Amazon reportedly is planning to launch a new e-commerce marketplace aimed at consumers in the Middle East, according to a CNBC story.
The report comes almost two years after Amazon acquired Dubai-based online marketplace Souq. Amazon is now advising North American sellers not to sign up for Souq, according to a CNBC claim attributed to unnamed sources.
Amazon also reportedly is reaching out to third-party sellers in North America with a chance to reach consumers in the United Arab Emirates and Saudi Arabia. Amazon has not confirmed these events and declined comment to CNBC, and didn't immediately return Retail Dive's request for comment.
Amazon appears to be revising its approach to addressing what could be a lucrative market for online sales in the Middle East. In the process, it could end up minimizing Souq.com, which it acquired for $580 million.
It’s unclear what will become of Souq or Amazon’s ownership of the marketplace, but it is not unheard of for giant companies expanding into international markets to drastically change their strategies, even after a lot of money already has been spent. It’s possible that Amazon wants a marketplace that more directly ties into its own fulfillment network and operations and that carries its own name.
Online marketplaces have become central to an increasingly lively, globe-spanning cross-border e-commerce market opportunity. China, for example, just surpassed the U.S. in retail growth for the first time in part due to Alibaba and JD.com. For North American sellers looking to sell into places like China and the Middle East, they need a reliable partner with brand name leverage and market reach.
Amazon certainly sees the potential. Setting up a new Amazon marketplace to serve the Middle East would be closer to what Amazon has done to enter and expand its market presence in places like India, where it has become a major player. Amazon's marketplace model has proven wildly successful overall, as of 2017 accounting for more product sales than the company’s own native e-commerce channel, and it could be ready to make a much bigger impact in yet another region of the world.