When Amazon bought the Dubai-based ecommerce giant Souq.com (the Middle Eastern counterpart to Amazon.com) in 2017, there were clear signs. It appeared that Amazon was looking to expand.
Amazon confirms those suspicions now, less than two decades later. Amazon Middle East is their new international marketplace. Amazon Web Services is the one who took charge of launching this store.
The AWS Region team will begin construction of the infrastructure required to get Amazon up-and-running in Bahrain. Amazon is preparing to support new innovators and new businesses by introducing these massive data centers and other resources.
What does this mean to third-party sellers
The obvious benefit is that you now have a second marketplace to choose from if your goal is global expansion. Amazon even encourages some of the biggest third-party sellers in North America, to head east. It remains to be seen if they offer any incentives for that move.
Sellers who are currently selling on the Souq ecommerce platform may not be able sell when Amazon Middle East opens. Amazon has instructed sellers to list on the new marketplace and not Souq.com. The 52 full-time positions listed on the site as of 2/11/19 show that Amazon is not yet certain whether Souq.com will be closed.
Is the Amazon Middle East market risky?
Potentially yes, as a large portion of the Middle Eastern population doesn’t shop online. In the United Arab Emirates (UAE), it is still highly valued that you can shop in person at high-end shopping centers and malls. Many people also associate Souq.com as selling counterfeit goods. Many shoppers have experienced fraud in the past and are skeptical about the authenticity of the products on Souq.com. These same buyers may assume that the products on Amazon’s new store are also counterfeit.
It’s highly likely that many consumers will still give Amazon Middle East another chance. Amazon’s commitment and quality of sellers on its new platform, proving professionalism and product quality to customers, might convince even the most skeptical buyer to reconsider online shopping.
If you are a seller who is looking to expand internationally, consider your product range. Your success will depend on the Middle East’s customer base and what products they can’t access. To reduce the risks, consider doing running some Amazon competitor product reports to get a better idea of the market landscape before launching a product.
Remember to keep an eye out for the competition
Souq.com serves the UAE primarily, Wadi.com is focused on the Saudi Arabian market. Both platforms were dominant in the e-commerce marketplace before Amazon came along.
Noon.com, another online giant, is also available. Although it’s still in its infancy and should be watched, it is a company to keep an eye on. As you can see, Amazon isn’t the only player in town. It will be fascinating to see how Amazon compares with its competitors. They will be able stand out.
Forward looking
Positively, the Middle East’s ecommerce sector is growing faster that any other market. Amazon continues to expand into new markets, despite its losses in international operations last year. Amazon announced plans to invest in global marketplaces throughout 2019, as part of its 4th quarter earnings report. We will be watching to see where they go next!
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