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April 11, 2023: Amazon sellers are eyeing opportunities to expand their business in the Middle East, a region that Amazon has not yet fully penetrated. Amazon first launched its Marketplace in the Middle East region, which includes the United Arab Emirates and the Kingdom of Saudi Arabia, when it rebranded souq.com, a Dubai-based e-commerce company it had acquired in 2017 for $580 million. The company’s accelerator Pattern expects a 50% increase in its client base in 2023.
When Amazon launched its platform in the UAE in April 2019, it already had more than 10,000 merchants, many of whom were from the United States and Europe. These sellers also had access to Fulfillment by Amazon (FBA) and the same seller back-end technology as in the US. Since then, Amazon has expanded its presence to countries like Egypt, introducing a number of services, including Prime, same-day, and next-day delivery using the same technology as in the United States.
A report by McKinsey in September 2022 revealed that the number of people in the UAE and KSA (knowledge, skills, and abilities) who shop online on a weekly basis has doubled in two years, with sales expected to reach $8 billion by 2025. The report also highlighted that 42% of shoppers buy groceries online at least once a week. David Quaife, general manager for Amazon’s Middle East and North Africa region for Amazon’s Pattern, said they had seen some decent sessions and orders going into the Middle East.
In the past, the only way to get into the Middle East market was through partnerships with local franchise partners or distributors. These contracts typically required brands to lock in for five years or longer. However, Amazon agencies are now ramping up support to help brands sell through Amazon in the Middle East. Podean set up a regional headquarters in 2020, while Pattern established an office in Dubai in 2018. The company represents about 20 brands in the region, including Thorne and Kong, with this number expected to grow rapidly.
