Just until a few years ago, buying anything that you wished and getting it door delivered in short time was more of a new trend for convenience that was unheard of. (Show souq brand)
But that is what souq.com is all about, providing unmatched services to the users in the entire Middle East making their lives easy. Souq.com has streamlined and executed its system processes to become the top-level e- commerce company in the world, so much so that, it hosts a sales of 50 million products. That’s not all. Making peoples’ lives easier through their services by fostering the culture of innovation and invention and simplifying user needs. So how big is it and how was souq.com started, we will find out in this video. **
The story begins in Syria in 2000. When Ronaldo Mouchawar came back to his country after having studied Engineering at Northeastern, in Boston. It was during this time that he’d meet two Jordanians – Samih Toukan and Hussam Khoury – a meeting that would trigger a series of events that transformed Mouchawar’s life forever. Ronaldo Mouchawar joined forces with Maktoob, the first successful web portal in the Middle East, with an Arabic e-mail service and the largest Arab online community, that helped Arabs globally communicate with each other. In 2006, he hit on the idea of founding Souq along with other co-founders Samih Toukan and Hussam Khoury. The word ‘Souq’ meant ‘marketplace’ in Arabic. The inspiration for the website’s name originated from a town called ‘Aleppo’ in Syria where Mouchawar was born. And this was the first step of Souq.com, they set up their office in Dubai. It all started with the idea that slapping a small Arabic keyboard to a Web page would change things. Launched as a part of the Arabic web portal Maktoob.com, Souq had a number of verticals on it, which included everything from online auctions to real estate classifieds. In 2009, following Maktoob’s sale to Yahoo, Souq came into its own as an independent entity, and that was when it began to pivot from its original model. The business grew fast. The recording auction
transactions were worth more than 3 million UAE dirhams a month (close to US$1 million). However, raising money was a big challenge. Local venture funds did not understand technology, and most capitals were invested in infrastructure, construction, and the petroleum sector. Many investors were keen to invest in Dubai for a mall or office blocks—but not for internet companies. Mouchawar, however believed that the future lied in B2C. Even though the auction model collectively accounted for approximately 80% of the company’s business (fixed- price sales accounted for the remaining 20%), they had to change to the b2c model. This decision was implemented after the joining of Wisam Daoud as CTO who was working before on Ebay. Unfortunately, they lost 80% revenue in 1 night when they closed down the Auction model and switched
to the ecommerce platform model. But this really didn’t stop them. Mouchawar quotes “the faster you fail the faster you learn”
The risk and efforts paid off, it took 6 months to come back and they started doubling their revenue every quarter. In March 2014, the company raised $75 million from Cape Town, South Africa-based Naspers. It raised $150 million, the largest amount raised by any internet-based business in the Middle East. The company was also backed by Tiger Global Management and Naspers Ltd. as of 2015. In October 2015, it was reported that in a round of fundraising, the company was valued at around $1 billion. That’s huge for this region. Fast forward to now, Souq.com gets 1.5 million visits a day, 8.4 million products in 31 categories, including consumer electronics, fashion, health and beauty making it the most visited shopping destination in the Middle East, has about 70,000 merchants on its platform. Many merchants on souq.com site have expanded from selling fewer than a dozen products a week to turning over millions of items and dollars each year. Stretching over entire Middle East, souq.com’s attention success was caught by global e-commerce and logistics giant Amazon.com and made the biggest acquisition in Middle East, Amazon.com acquired Souq for an undisclosed amount, which by sources say could be near to 600$ million. This acquisition has benefited both to run the business together. As of the recent servey, The Middle East’s e-commerce sector, which is growing at the fastest pace globally with online sales expected to double to $48.8 billion
But also not to forget, the company also faces tough competition with a newcomer noon.com, the $1bn e-commerce site backed by Mohamed Alabbar (chairman of Emaar Properties, whose subsidiary Emaar
This year Souq partnered with 3m to feature their innovative products so that its customers in KSA, Egypt and KSA can get easy access to products they will need to meet everyday needs. Souq has invested in 8 start ups, pioneered e-commerce in the Middle East, creating a great shopping experience for their customers. It has already spread its wings into other GCC tech start-ups that prop up its core offering and Mouchawar willingly leaves open the prospect of more investments. So, when you look at the story of Souq.com success may seem to have been inevitable, but certainly, it wasn’t when it started out. Souq.com looked more of a technology company than retail. The reason for Souq’s success are 6 Key factors.: Trust, fun, innovation, initiative, growth and the “wow” factor.