Series: Built in the UAE – Part 2: Souq – Harnessing the power of e-commerce
Welcome to the second instalment of our ‘Built in the UAE’ entrepreneurial series. Today is the turn of Souq, with its market-leading e-commerce site.
If a consumer-facing business wants to succeed in today’s world, it needs to address the growing demand for convenience. Enter Souq: established in 2005 as a small auction website with just five employees, today its workforce totals more than 4,500 and in 2017 it was acquired by global giant Amazon.
Consumers and entrepreneurs alike across the UAE will be familiar with Souq’s wide product catalogue: from consumer electronics to household goods, fashion, toys and more. Now, as part of the Amazon empire, its potential spans the entire platform of the e-commerce giant.
Over the past years, we have seen the UAE government take a leading role in promoting the e-economy. But Souq was up and running long ago. A forerunner of this new wave of UAE home-grown e-companies – tech-savvy and with digital in their DNA.
What are a few of the key principles that led to Souq’s success?
Be ahead of the curve: Without a doubt, online purchasing is going to be the dominant retail model of the future. For traditional brick-and-mortar suppliers, this may mean an entire rethink of their business model if they are going to survive. A company like Souq that was born in the digital age has been riding that powerful wave from day one. That founding year of 2005 is a long long time ago. We have to remind ourselves just how far ahead of the curve Souq actually was.
Be ready to adapt: That being said, Souq’s meteoric rise was not inevitable. While its original website took off very quickly, it soon became apparent that more and more consumers preferred shopping on mobile devices rather than laptops. This was what prompted the development of Souq into an app business rather than just a website. The lesson here? Listen to the markets and anticipate as much as possible.
Be open to global partnerships: Souq recognised a huge opportunity and grabbed it; but from the start its owners were also smart enough to realise that strength comes through combining strengths. Established at a time when local venture firms were not familiar with tech, it actively sought global investment support from US and South African firms. This allowed it to eventually attract the attention of Amazon. The rest, as they say, is history.
But even so, success like this doesn’t happen overnight, and it’s not a case of luck. Souq has had to seek out the right investors, study the market, and adapt to achieve its dominant position in the Middle East.
And there is much more ahead for Souq and other digital startups, as CEO Ronaldo Mouchawar says: “We have plenty to look forward to together: the Middle East still has huge e-commerce potential, and we are currently operating in only a few geographies. We will see more and more investment like Amazon’s in new businesses, bringing the opportunities and the jobs we all aspire to create.”
Next up we’ll be looking at the UAE’s the Entertainer, a leading leisure discount app with over 3 million members globally. To catch up on all our past content just visit our blog.