E-commerce giant Amazon announced Tuesday plans to expand its presence in the Middle East.
The U.S. firm is buying the largest online retail platform in the Arab world Souq.com for an undisclosed amount. Souq.com reportedly attracts over 45 million visits per month.
Russ Grandinetti, Amazon senior vice president, said in a statement: "Souq.com pioneered e-commerce in the Middle East, creating a great shopping experience for their customers …Together; we'll work hard to provide the best possible service for millions of customers in the Middle East."
The Emirati company has been the target of speculative chatter about its future for several months, with a number of potential acquirers interested in either its entire business or a sizeable stake. Price tags valuing the company as high as $1 billion have been cited by media reports.
It is thought that the price paid by Amazon is notably lower than this threshold for entry into the so-called 'unicorn club' of tech firms who boast valuations above $1 billion, with TechCrunch suggesting that the winning bid was more in the region of $650 million.
Since launching in the United Arab Emirates in 2005, Souq.com has sought to branch out into additional regional counties, with pushes into neighboring Bahrain, Oman and Kuwait, as well as Egypt, kicking off in recent years.
Until today, Amazon did not have a presence in the Middle Eastern region which has a population of around 50 million consumers but currently displays a very low level of online retail spend penetration. According to a report from McKinsey, only around 2 percent of retail transactions take place online today.