AmazonAMZN sellers see an opportunity to expand in the Middle East. This is an area that Amazon has not yet fully penetrated. Amazon’s accelerator Pattern expected its base of clients to jump 50% in 2023. Amazon initiated its Marketplace in the Middle Eastern region which includes the Unite Arab Emirates and the Kingdom of Saudi Arabia when it rebranded soug.com, a Dubai based e-commerce company it had acquired in 2017 for $580 million.
When in April 2019 it first launched Amazon UAEUAE, the company had more than 10,000 merchants, many were from the United States and Europe. Sellers also had access to FBA (fulfillment by Amazon) and the same seller back-room technology as in the United States. In September 2019, Amazon launched its demand-side platform that enabled advertisers to program buy displays and video that air in the UAE. More recently, in 2021, Amazon expanded its presence to countries like Egypt. Since that time the company has introduced a number of services including Prime, same day and next day delivery with the same technology as in the United States.
A McKinsey report in September 2022 stated that “the number of people in the UAE and KSAKSA {knowledge, skills and abilities) who shop on line on a weekly basis has doubled in two years. This result is very strong for overall e-commerce. Sales were expected to reach $8 Billion by 2025. McKinsey also reported that 42% of shoppers buy groceries on-line at least once a week. David Quaife, general manager for Amazon’s Middle East and North Africa region for Amazon’s Pattern said that they are seeing some decent sessions and orders going into the Middle East. He added that at Pattern, which has seen a lot of data on the Amazon platform, and we have seen some decent sessions and orders going into the Middle East.
Of course, Amazon has to fend off competition from local rivals like Noon and Launched. Noon is backed by the Saudi sovereign fund and Mohamed Alabbar. is the largest property developer in the region. Noon’s home page is filled with many categories including Samsung phone and PhilipsPHG personal care.
Amazon agencies are ramping up support to come into the Middle East and explore how they can grow in the market. Amazon is based in the UAE. “We have an office there and multiple warehouse sites, and we can cater to the Amazon market here said Quaife”
In the past, the only vehicle to get into the Middle East was by partnership with the local franchise partner or distributor. Typically, these contracts require brands to lock in for five years or longer term. Now Amazon agencies are ramping up support to help brands sell through Amazon in the Middle East. Podean set up a regional headquarter in 2020.Pattern also set up an office in Dubai in 2018. Pattern says it represents about 20 brands in the region, including Thorne and Kong. These numbers are expected to grow rapidly.
POSTSCRIPT: Developments are rapidly coming with new brands joining those already in e-commerce. Locals in Egypt told us that there are not enough brands on the platform. With an intensification of promotions, it is likely that in the next two years we will see substantial growth.
