The sands of online bookselling in the Middle East are shifting.
At the end of February, Dubai online retailer Souq.com launched what it called a new “global bookstore,” with plans to offer six million titles for sale. At the time, Ronaldo Mouchawar, CEO of Souq.com, said “We are aligned with the UAE’s National Reading initiative and this category expansion comes at an interesting time when we are witnessing new momentum in the culture of reading across the region.” Yesterday, March 28, Amazon announced it was buying the company, though it appears that no books are yet available for sale on the site.
Souq is considered the dominant online retailer in the Gulf and Middle East, an area that has been notoriously difficult to service, in part because of difficulties in distribution and processing of payments. Like Amazon, it sells a full range of products, from cell phones to beauty supplies. It attracts some 45 million visitors annually and has local operations in the UAE, Saudi Arabia and Egypt.
"Amazon and Souq.com share the same DNA – we’re both driven by customers, invention, and long-term thinking,” said Russ Grandinetti, who previously served as v-p of Kindle Content and is now listed on the press release as Amazon senior v-p, International Consumer. "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.”
Amazon had made overtures towards opening in the UAE and the Middle East for several years and was known to have taken meetings various industry trade events throughout the region.
But the area, which is politically and economically volatile, faces numerous challenges for a retailer, particularly when it comes to books. For starters, books are often subject to censorship, typically for religious reasons, and moving them across borders is a significant challenge. Couple that with a lack of credit cards for purchases and the lack of traditional mailing addresses in many parts of the region, and an online retailer faces many challenges.
Still, Amazon’s purchase of Souq.com may be the first of several major moves into the territory.
Amazon already had a loose partnership with Jamalon, an online bookseller based in Amman, Jordan that has been in business since 2010 and offers some 10 million titles in English and Arabic. Amazon has advised Jamalon on logistics, while the company provided Arabic titles to Amazon.
Jamalon notably addressed some of the challenges of book distribution in the region by employing a cash-on-delivery service and relying on locating customers through calls to their cell phones, much as Souq.com employs. Censorship remains an issue, but can be circumvented by requiring customers to purchase only locally available titles. Orders are fulfilled through distribution centers in Jordan, the UAE, Lebanon or the U.K, and whenever possible, transferred directly to local publishers who supply the “last mile” of fulfillment. The joke for many years in the Middle East was that books could be distributed as far as someone could carry them on their back. With Amazon, and its promise of delivery by drones, surely that will change.