In Prediction Eight of our 2017 Predictions for Industry and Global Supply Chains, we predicted that Amazon and Alibaba will aggressively continue to deploy strategies directed at global online buying platform dominance, but will remain cautious to perceptions of outright head-to-head competitors. We anticipated that India, other parts of Asia and perhaps the Middle East would be battleground areas in the coming months.

Thus far we have provided some updates to developments in these regions, and now we provide Supply Chain Matters reader attention to yet another of market significance.

Last Wednesday, Reuters, and the Financial Times, citing familiar sources, reported that Amazon had agreed in principle to buy Dubai-based internet retailer, noted as one of the best-known names in the Middle East’s online shopping market.  The site which sells consumer electronics, fashion, household items and other goods, lays claim on its website to being the largest e-commerce site in the Arab world. Reuters sources declined to comment on any monetary sizing related to such a deal.

According to Reuters, offered Amazon expertise and a foothold in a region where e-commerce is expanding quickly thanks to a young and tech-savvy population. Amazon declined to comment to Reuters, and a spokesperson for likewise did not immediately respond to a request for comment.

A day later, Tech Crunch ran with a similar acquisition headline citing review of various existing reports as well as confirmation with its own sources, indicating that the e-commerce giant has acquired Souq for a price of $650 million. A source close to the Dubai based site told Tech Crunch that “The ink is dry” on the deal already. The publication further observed: “The deal lets Amazon — which has never had business operations in the Middle East — hit the ground running with an already-large, established operation.” This report reinforces the perception that Souq is often described as the Amazon of the Arab world. Once more, the report indicates that Amazon will additionally acquire even more important existing logistics and customer fulfillment operation along with Souq’s online payments gateway Payfort, both localized to regional needs. Both Souq and Amazon declined to comment to Tech Crunch on its report.

Yesterday, Bloomberg, citing people familiar with the matter, reported that Emaar Malls PJSC, the shopping-center unit of Dubai’s largest publicly-traded property developer, had bid a reported $800 million for Souq. According to this report, a final agreement has not been reached with any bidder, again with either Amazon or Souq declining to comment.

We do not presume to declare the outcome of events surrounding the attractiveness or ultimate sale of Subsequent announcements or confirmations will be the final determinant.

We did, however, want to bring reader attention to these reports since they depict a picture of the ongoing strategic positioning that online sites are undertaking to secure needed platform scale among key geographic regions, and in-particular, emerging areas of where online consumer growth has the strongest upside potential.

Stay tuned.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.