Amazon has declared the official launch of Amazon.ae. The Seattle-based company has been trading in the UAE since 2017 through the Souq marketplace. However, in a statement issued May 1 Amazon announced the news that many commentators had been expecting.
Customers in the region can buy from the new website, or from the Amazon.ae app. Shoppers in the region will have all the benefits other global consumers have become accustomed to. This will include fast deliveries, free shipping if an order exceeds a specified amount, easy credit card payments or cash on delivery, and customer recommendations.
For its new website, Amazon has introduced localisation, a feature that is becoming increasingly important as the demand for ecommerce grows around the world. Both the website and app will be available in Arabic.
The site lists 30 million products from local and international sellers, some of which were already sold on the Souq marketplace. In addition, a further 5 million products from Amazon.com will be offered to UAE customers.
Existing Souq members will be transferred to Amazon’s UAE site, where they will also be able to track their order history.
Commenting in a press release,
Ronaldo Mouchawar, Co-Founder of Souq, Vice President of Amazon MENA, said:
“Amazon.ae brings together Souq’s local know-how and Amazon’s global expertise, something we believe will be of significant benefit to UAE customers. Our combined team in the region has grown to over 3,600 employees, and each and every one of us is thrilled to invite UAE customers to join us on this journey, where we will continue to grow our product range, ensure great prices, and provide a convenient and safe shopping experience.”
What does the announcement mean for sellers?
Some entrepreneurs in the region have already been thriving by selling on the Souq marketplace. But the wider question has been regarding the implications for global sellers. As things stand, the prospects certainly look promising, and the newly formed marketplace is likely to lead to new opportunities for businesses in the UAE and further afield. At the time of writing, ecommerce only accounts for two per cent of retail sales in the middle east and more households are adopting the internet, meaning there is plenty of room for development.
The rebrand offers obvious advantages for professional sellers just venturing into the UAE. Amazon.ae has a full set of features already in place that reduce admin; all the usual options like bulk listing, reporting tools, business reporting are there. Likewise, Fulfilment by Amazon is available, meaning shipping to the region and handling customer care is simplified.
To encourage businesses, Amazon.ae is tempting professional sellers with a free monthly subscription for a limited time. But sellers need to be aware the number of categories they can list in is limited to 25. For those thinking of expanding into the area, now could be the time to do it. However, it might mean reassessing your current product lines to cater for a middle eastern audience; determining which products are hard to access or are in demand could establish a new income stream for your business.
For instance, Amazon’s marketing is in full force with a Ramadan sale offering significant discounts. Everything from Ramadan supermarket specials to Ramadan electronics are being featured heavily across the site. Catering for religious festivals or specific cultural events is just one area that a professional seller could explore.
However, although the potential looks good, there is a note of caution. Amazon has stated that there are seller protections in place, but trading in the middle east isn’t without its risks. Having risk management in place and an understanding of cultural differences will also be crucial to successful selling.
It’s also worth noting that there are still limitations in this marketplace. The ever talked about advertising programmes that have been rolled out across numerous marketplaces are still not up and running on Amazon.ae . That being said, it’s clear Amazon is busy forming a team of advertising specialists in this region. Since the beginning of this year, there has been a job post for a “Regional Head of Advertising Sales“.
Is Saudi Arabia next?
Following the announcement, commentators are naturally speculating on Amazon’s next move. Some predict that a venture into Saudi Arabia is on the cards, and that’s not too much of a leap.
Amazon is highly popular in Saudi Arabia and currently uses third party vendors to sell its products. In addition, there’s already been reports that Amazon is in early stage talks with a view to establishing a physical presence in the country.
Ecommerce revenues in Saudi Arabi are in an upwards climb. Although Amazon.ae caters for Saudi customers too, it would seem unlikely that the company would not want to expand to Saudi Arabia, especially as the call for ecommerce heightens.
Nevertheless, Amazon’s plans to make its mark on Saudi’s ecommerce sector won’t be without its difficulties.
Amazon was already set to do business in the country. However, there’s been a reported dispute between Jeff Bezos and Prince Mohammed bin Salman. This alleged disagreement could make the Seattle-based company’s move into Saudi Arabia more complicated.
The Amazon.ae launch shouldn’t come as a surprise. Amazon made its intentions clear on middle east expansion some time ago. It completed its requisition of Souq back in 2017 and had already established an audience of millions on its Souq platform.
All this coupled with promising ecommerce sales in the middle east, it wasn’t going to be long before Amazon, as one of the most successful internet businesses in the western world, made its move.
From current reports Amazon looks primed to continue its expansion into the middle east, with Saudi Arabia likely to be its next target.
These developments are, of course, positive news for sellers who want to enter the region with a ready platform of millions to sell to.