Once known as the 'eBay of the Middle East' Souq.com, the most visited online retailer in the Middle East, is to eliminate its auction-selling service.
Refocus of Souq.com will end auction service
Souq.com, the most visited online retailer in the Middle East, will eliminate its auction service as the website looks to triple its product listings over the next year.
Souq.com launched the service in 2005 and quickly drew comparisons as the "eBay of the Middle East". But the website will shift its strategy to offering goods only at fixed prices, encouraging traditional retailers to sell their products on its platform.
Ronaldo Mouchawar, the chief executive of souq.com, said that deciding to end online auctions was not easy but that internal research determined that few auction sales had occurred on the site over the past few months.
"The decision to switch our focus was inevitable," Mr Mouchawar said. "We just felt with the number of items on the site, it was a good time to move forward and introduce new features, such as product reviews and price comparison services.
According to recent research analysis from Arab Advisers, a technology consultancy, souq.com is the most visited Middle East online retailer Its competition includes portals such as Neelwafurat.com, Essoog.com and ilakta.com.
The website is the leading property of Jabbar Internet Group, the largest Middle East online retailing company, which operates in other sectors such as gaming, group buying and internet advertising.
Over the past year, souq.com has opened websites in Saudi Arabia, Jordan, Kuwait and Egypt and has signed up retailers such as iStyle, Ayhan, and Sharaf DG to provide dedicated shopping portals.
"It took about 12 months of analysis for us to be convinced that we would not be offering auctions any more," Mr Mouchawar said. "I had to be personally convinced and made the decision after only a handful of auctions closed [in November]."
Souq.com lists about 120,000 products on its website compared with just 5,000 auctions. Mr Mouchawar projects that up to 400,000 items could be added over the next year.
If souq.com's projections for growth are accurate, its expansion would help to catalyse the region's burgeoning online retail market, which still represents just a fraction of the total retail market.
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UAE consumers spent an estimated US$19.6 million (Dh71.9m) on online purchases in 2009, the most recent year for which figures are available, compared with an estimated total of $10.9 billion of non-grocery retail spending in bricks and mortar shops, data from the research firm Euromonitor shows.
E-commerce in the UAE should grow by 72 per cent to about $33.7m by 2014, Euromonitor forecasts.
"The goal here is really simple," Mr Mouchawar said. "We and our sellers want to provide the best shopping experience to buyers and create a place for them to easily buy items."
Still, while souq.com aims to make it easier and cheaper for retailers to sell goods online, some are not convinced the system is ready.
Narain Jashanmal, the executive vice president of media and distribution at Jashanmal Group, said in a post on the question-and-answer website Quora that souq.com had "got some way to go" before it could be fully adopted by the region's retailers.