Amazon sellers eye expansion in Middle East 

Amazon sellers are set to expand their online stores to the Middle East to harvest the region’s full potential.

Amazon accelerator Pattern expects its base of clients in the Middle East to skyrocket by 50 per cent this year. As governments in the region continue to nurture a favourable environment for businesses, it has become a more lucrative entry point for Amazon sellers. 

General manager, Mena, for Amazon Pattern, David Quaife, told Modern Retail: “I would say that in the last three or four years e-commerce has grown very fast within the region. And that’s largely been driven by the acquisition of Souq by Amazon.

“With the growth of Amazon, especially in the UAE and Saudi Arabia, it has allowed for a vehicle for brands to come into the Middle East with a lot less risk.”

In April 2019, Amazon launched its marketplace in the region including the UAE and Saudi Arabia when it rebranded Dubai’s e-commerce company souq.com that it had acquired in 2017 for $580 million. 

At the time of its launch, Amazon UAE had amassed more than 10,000 merchants, many of which were based in the US and Europe. 

Two years ago,  Amazon forayed into Egypt, bringing its services including Prime same-day and next-day delivery to the country.

According to McKinsey’s report from September 2022, “the number of people in the UAE and KSA who shop online on a weekly basis has doubled in two years.” 

The outlook for UAE e-commerce retail market is promising, expected to hit $8 billion by 2025. 

The survey also revealed that 42 per cent of these shoppers buy groceries online at least once a week.

Mr Quaife said: “There are some brands that have had experience in this region or they’ve got some demand from that DTC website. And they’re seeing lots of deliveries coming out from Saudi Arabia to the UAE. And so they’re like, we’re actually seeing some decent sessions and orders going into the Middle East. Let’s explore it further.”

Mr Quaife noted that in the Middle East, numerous brands are getting sales but they aren’t aware of it.

Founder of Amazon Sellers Society, Krystel Abi Assi, the market size, stated that the consumer demand, competition and the regulatory environment all indicate the surging demand for Amazon in the Middle East region. 

Ms Assi added she manages more than 300 accounts on Amazon in the region – most of them SMEs.

“Amazon has a recognised presence and a brand name — and its presence in the Middle East provides sellers access to a very large and growing consumer base. The limited competition that’s in the Middle East is I think one of the biggest factors why a brand would want to expand into the Middle East.”

However, Amazon can face fierce competition from local retail behemoths such as Noon.com, backed by the Saudi sovereign fund and Mohamed Alabbar, the largest property developer within the region.

Ms Assi said: “Both [Amazon and Noon] have really kind of galvanized the e-commerce market for growth. What that’s also done is it has given a good entry point to brands that are not in the region.” 

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