Amazon said Tuesday it agreed to purchase Souq.com, the biggest e-commerce players in the Arab world.
Souq, which means marketplace in Arabic, started in 2005 and now sells over 400,000 products including electronics, clothes and household goods. It claims to have millions of customer visits every day. The deal had been rumored to reach $650 million, which would make the purchase Amazon's largest since 2014, according to Crunchbase. The Seattle company didn't disclose a purchase price.
The deal had been expected since late last year, but reportedly wasn't finalized until now due to disagreements over a price. Last week, Reuters reported that Amazon agreed in principle to the purchase.
The impending acquisition, slated to close this year, underscores Amazon's new push into emerging markets, in keeping with its broader goal to maintain its fast growth. Amazon is also expanding in Mexico, China and India, as its businesses in the US and Europe are maturing and as rivals at home up their e-commerce game.
E-commerce in the Middle East and North Africa, still a relatively small market, reached $8.2 billion in sales last year and is expected to jump over 230 percent to $27 billion by 2021, according to Euromonitor. The researcher said Souq.com was the leading seller in the region last year, hitting $1 billion in sales.
Amazon's announcement Tuesday was light on details, particularly on Amazon's plans for the acquisition. Moody's lead retail analyst Charlie O'Shea said in a statement Tuesday that the acquisition offers Amazon with "an inexpensive and low-risk 'beachhead' in the lucrative Middle Eastern market."
Amazon said the deal will allow Souq to keep growing.
"By becoming part of the Amazon family, we'll be able to vastly expand our delivery capabilities and customer selection much faster," Ronaldo Mouchawar, Souq.com CEO and co-founder, said in a statement, "as well as continue Amazon's great track record of empowering sellers."
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