Ronaldo Mouchawar, co-founder of Souq and vice president of Amazon Mena, founded Souq in 2005, initially as an auction site linked to internet portal Maktoob. Reuters
Ronaldo Mouchawar, co-founder of Souq and vice president of Amazon Mena, founded Souq in 2005, initially as an auction site linked to internet portal Maktoob. Reuters

Amazon begins direct sale of online goods through UAE portal as it looks to shake up retail



Amazon has begun selling products to UAE consumers through the recently-acquired Souq.com, as the world's largest retailer takes its first steps toward creating an online shopping culture in a country still dominated by bricks and mortar retail.

It began with a handful of Amazon-branded products this week but marked a significant step for shoppers that have long complained of hiked prices in the country's upmarket malls.

Experts said the move, which followed the purchase of Souq.com for $580 million in March, would begin give shoppers access to a service that has transformed global retail.

“While currently the range is very limited - basically featuring mobile and other consumer electronics accessories - we strongly expect that the range would be increased within the consumer electronics and travel accessories segments," said Rabia Yasmeen, an analyst at Euromonitor in Dubai.

At present, shoppers can order directly from Amazon but pay steep costs to 'shop and ship' goods or deliver through courier companies.

"The launch of AmazonBasics will give consumers access to a global private label at prices lower than Amazon.com," she said.

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AmazonBasics is the company's own brand of affordable products of everything from USB leads to kitchen utensils and Amazon-brand Apple Mac covers from just Dh29.

There are currently several dozen items from the range available on Souq.com, compared with about a thousand on AmazonBasics US website, with prices ranging from Dh20 to Dh60.

For example, an Apple certified lightning to USB cable costs Dh25; a laptop sleeve Dh29; and a gadget bag Dh65. Travel accessories such as a four-piece packing cube set are Dh55. Free shipping is available and there is also an extra 25 per cent discount on offer.

The move is the first clear link-up between Amazon and Souq since the US company completed its acquisition of the Middle East's largest online retailer. Users could already use Amazon accounts to login to Souq’s website.

Announcing the move, Souq founder and chief executive Ronaldo Mouchawar said the arrival of AmazonBasics meant UAE customers now could access a “great selection of best in class products at very affordable prices”.

But while the development is welcome for hard-pressed consumers, it raises the question of when local buyers will have direct access to services seen in other markets, such as overnight delivery from Amazon, plus Amazon Prime and Echo.

Amazon showed its economy of scale on Monday week when it dramatically slashed prices of products at the recently-acquired Whole Foods, the upmarket organic food chain, by as much as 43 per cent.

“The conventional supermarket has not evolved much in decades," Karen Short, an analyst at Barclays Capital, told Bloomberg.

"But Amazon will likely drive drastically different shopping behaviour in grocery. The survival of the fittest has begun.”

E-commerce in the UAE has been relatively small-scale in recent years, and shoppers still flock to malls boasting lavish food courts and other attractions. But, the expected arrival of new online marketplaces such as the $1 billion investment Noon.com business will likely change that.

Consultants AT Kearney expect e-commerce in the UAE to grow at a compound annual growth rate for 25 per cent per year up to 2020, with Frost and Sullivan estimating the market could be worth up to $10bn by next year.

"Anyone who executes the correct way in the next couple of years can get into the big league," said Pratik Gupta, co-founder of Wadi.com, an online market platform that launched with great fanfare in Saudi Arabia and the UAE in 2015, earlier this month.

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UAE’s global top spot in smartphone use gives local SMEs huge opportunities

Indoor cricket World Cup:
Insportz, Dubai, September 16-23

UAE fixtures:
Men

Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
Tuesday, September 19 – 12.15pm, v Singapore; 5.30pm, v Sri Lanka
Thursday, September 21 – 2pm v Malaysia
Friday, September 22 – 3.30pm, semi-final
Saturday, September 23 – 3pm, grand final

Women
Saturday, September 16 – 5.15pm, v Australia
Sunday, September 17 – 2pm, v South Africa; 7.15pm, v New Zealand
Monday, September 18 – 5.30pm, v England
Tuesday, September 19 – 10.30am, v New Zealand; 3.45pm, v South Africa
Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final

ELECTION RESULTS

Macron’s Ensemble group won 245 seats.

The second-largest group in parliament is Nupes, a leftist coalition led by Jean-Luc Melenchon, which gets 131 lawmakers.

The far-right National Rally fared much better than expected with 89 seats.

The centre-right Republicans and their allies took 61.

DUNGEONS & DRAGONS: HONOR AMONG THIEVES

Directors: John Francis Daley and Jonathan Goldstein
Stars: Chris Pine, Michelle Rodriguez, Rege-Jean Page, Justice Smith, Sophia Lillis
Rating: 3/5


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