Amazon, the global online retail giant, has been on an upward trajectory since its inception in 1994. The company's expansion plans have taken it to different world territories, including the United Arab Emirates (UAE). It has made significant progress in the UAE market, introducing new services, expanding its product range, and creating jobs in the region. This case study highlights Amazon's journey in the nation, from its launch to its present status and future plans.
Entering the UAE Market
In May 2017, Amazon entered the United Arab Emirates (UAE) market by acquiring Souq.com for 580 million dollars, the region's leading e-commerce platform. Souq.com reportedly drew over 45 million monthly visits and had a significant market share in the UAE, accounting for 78% of the country's e-commerce sales in 2017.
According to industry experts, the acquisition helped Amazon reach a huge number of potential customers in the Middle East and North Africa region. Also, the acquisition enabled Amazon to leverage Souq.com's logistics network, payment infrastructure, and customer base to launch its services in the area.
Taking Over the UAE Market
After the acquisition, Amazon officially launched its Middle East marketplace in the UAE in May 2019. The company rebranded Souq.com, its online presence in the United Arab Emirates (UAE), by renaming it to Amazon.ae. Amazon's entry into the market disrupted the e-commerce industry, challenging established players such as Noon and Namshi.
According to a survey conducted by YouGov, Amazon is the most preferred e-commerce platform in the UAE, with 38% of the respondents using the platform for online shopping. In September 2019, Amazon took another significant step towards capturing the market by offering over 30 million products from local and international companies, including products previously available from Souq and 5 million from amazon.com. Furthermore, Amazon introduced free next-day shipping for purchases above Dhs100 and paid same-day shipping for specific regions in the UAE.
Amazon's Website in Arabic
In May 2019, Amazon launched its first Arabic website in the UAE, enabling the company to tap into the vast Arabic-speaking population in the region. The website's launch enabled Arabic-speaking customers to browse and shop for products in their preferred language, enhancing their shopping experience. According to industry experts, the launch of the Arabic website was a significant milestone for Amazon, as it provided access to a market with substantial growth potential.
Upon exploring the revamped Amazon.ae, it becomes apparent that the e-commerce platform is tailored to cater to the Middle Eastern lifestyle. Shoppers can peruse offers on Ramadan food and fashion, as well as Amazon products that are marketed in the United States. The items available for purchase are diverse and range from prayer rugs to Fitbit devices to well-known local snacks. For the first time, Amazon.ae's mobile application will be accessible in Arabic, marking a significant milestone for the company.
Expansion and Future Plans
In 2021, Amazon announced its plans to open its first fulfillment center in Dubai, enabling the company to improve its delivery times and expand its product range. Scheduled to open by 2024, the facility was expected to use machine learning and artificial intelligence (AI) technologies to improve its operational efficiency and customer experience and expedite deliveries. In addition to creating jobs in the logistics sector, the development was intended to help entrepreneurs, start-ups, and small to medium-sized businesses (SMBs) amid the nation's transition to digital platforms.
In 2023, Amazon announced it would double the number of SME retailers in its UAE store by 2026. The e-commerce giant plans to sell products from 100,000 small retailers in the UAE by 2026, which currently displays the products of 50,000 local and international companies in its store. The move is part of Amazon's efforts to support small businesses and entrepreneurs in the region and help them grow their online presence.
Amazon's journey in the UAE has been a resounding success. Since its entry, the company has quickly taken over the market and expanded its presence in the region. At present, the retail magnate is a crucial collaborator in the UAE and Dubai's strategy to develop the digital economy and provide prospects for entrepreneurs to harness advanced e-commerce technologies to amplify their enterprises. With the launch of its Arabic website, Prime service, and grocery delivery service, Amazon has shown its commitment to catering to the needs of its customers in the UAE. Looking ahead, Amazon's plans to open a fulfillment center and support small businesses in the region are a testament to the company's long-term commitment to the UAE market.
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