U.S. e-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) Tuesday announced to acquire Dubai-based Souq.com, a move that shows its ambitions to expand its business in the Middle East.
Both Amazon and Souq.com didn’t disclose the amount of the deal. The Dubai-based e-commerce site had a valuation of $1 billion in its most recent funding round.
"Souq.com pioneered e-commerce in the Middle East, creating a great shopping experience for their customers …Together; we'll work hard to provide the best possible service for millions of customers in the Middle East." Russ Grandinetti, Amazon senior vice president, said in a statement.
Founded in 2005, Souq.com reportedly attracts 23 million online visits per month. The site was launched in the United Arab Emirates, and then expanded to Bahrain, Oman, Kuwait and Egypt. But the online retail spend penetration is still very low in the Middle Eastern region. According to a report from McKinsey, only around 2 percent of retail transactions take place online today.
This is the one of the biggest acquisitions Amazon has made in the recent years. The deal will help boost Amazon’s oversea expansion to better compete with rivals like China’s Alibaba Group Holding Ltd.
Amazon shares rose 0.91 percent to $854.63 in the early trading.
“Amazon and Souq.com share the same DNA -- we’re both driven by customers, invention and long-term thinking,” Grandinetti said.