So the Internet is somewhat ablaze with the news that the biggest exit in the GCC has been confirmed with Amazon’s acquisition of Souq.com
Souq.com started out in 2005 as an auction site (like eBay) and has gradually evolved into an online marketplace. It’s been a rollercoaster 12 years and it’s impressive to say the least. With such an uphill battle to build a presence and maintain it, it’s great to see Souq getting to this stage.
I’ve only used Souq.com a handful of times, mostly because I haven’t had a need to buy much but also because product variety and some ridiculous seller ratings have been off putting. In fact, seeing sellers with less than 90% rating is common on Souq, which should be alarming because trust is such a huge issue.
For those who aren’t aware, Souq (sometimes spelled souk) refers to a typical open-air market in Arabic and often just refers to a marketplace of sorts. So when you see a lot of e-commerce sites with souq in the name, they’re merely referring to the Arabic meaning of the word, not piggybacking of souq.com’s name. I think the distinction is very clear in this case. No doubt, others would be looking to see if they can reach Souq’s status as a household name in the region and a potential acquisition.
So how does one get bought out by Amazon? or at least, make an exit of note in the region?
You have to wait. It won’t come quickly or easily. Not say you need to wait 12 years as Souq did in order to get bought out by Amazon.
What you need to do is address the core issues that plague e-commerce in the region:
Product Variety – if you are able to give people what they want, in particular hard to find items locally which seem commonplace elsewhere, then you’re going to get a very good reputation very quickly as word of mouth spreads across town that you’ve got the goods that no one else has.
Price – if you’re selling directly, then you’ve got your work cut out for you to compete on price. Despite a lot of favourable conditions in the region to offer affordable goods, people somehow find that buying via Amazon in the US or UK works out cheaper, even with parcel forwarding! Offering free shipping locally is a huge drawcard and if that’s not financially possible then at least offer flat rate shipping. If you’re going down the marketplace route (not easy!) then you’ve gotta work super hard with sellers to ensure they’re not pricing your marketplace out of competition in every respect from price of goods to shipping.
Delivery – quick delivery is key and in a place like Dubai where we’re used to getting everything delivered at almost all hours of the day, it’s a big deciding factor. Ounass.com offers 2 hour delivery within Dubai for their luxury goods (it comes with the usual caveats though) and at one point, JadoPado.com used to deliver same day for just about anything that they sold provided you ordered early enough. It worked very well despite Dubai’s sometimes confusing roads and ever increasing traffic.
Payments – it should go without saying, you need a solid payment gateway that accepts credit and debit cards. This is not open for discussion, unlike cash on delivery which is still a hot debatable topic. JadoPado.com dropped support for COD because it worked out to be costly for the business with many rejected orders and returns. We’re used to COD for everything here too but it’s not the way forward, especially in light of cashless systems making their way to the region. Mumzworld.com mentioned how they offered COD up to a certain amount then after that you had to pay via card. With the launch of SamsungPay in the region and hopefully, soon, PayWave and PayPass from Visa and MasterCard respectfully, you can see the need for robust handling of payments.
Customer Service – anyone who’s been here more than 6 months will attest to the terrible customer service we have to put up with. So it’s very clear what you need to do in order to stand out: get your customer service in order! Give your staff a bit of rope and allow them to work some magic for customers when things don’t go to plan and also, it wouldn’t hurt to train your staff on how to deal with customers. It shouldn’t be a chore. JadoPado had some of the best customer service people in town and they did a stellar job in times of joy and strife. You should do the same.
I really hate how we have to rely on overseas sites and parcel forwarding in order to get the things we want. This region is ripe for some major e-commerce disruption and no doubt Amazon will do just that. Noon.com has been lurking so it remains to be seen what that will change, especially since JadoPado is no longer in the picture courtesy of an acquisition by Emaar Malls.
So it’s safe to say, we’re going into exciting times. Although my list is not exhaustive, it covers the basics. And no doubt, there are other unseen challenges in working in the region but I believe if we’re going to get anywhere, we have to start having tough conversations. Otherwise we’ll just be left behind.