In the initial days of Souq.com, it was the mobile phone that propelled the business as the turn-of-the-decade smartphone mania gripped the world and the region.
With electronics, mobile phones included, forming a bulk of its sales, Souq.com soared to become a regional internet giant that sells almost 1.5 million products across 30 odd categories in the Middle East and North Africa (MENA), attracting almost 45 million visits per month, with over 10,000 merchants.But even as mobile phone sales have somewhat leveled off, Ronaldo Mouchawar,
But even as mobile phone sales have somewhat leveled off, Ronaldo Mouchawar, CEO and co-founder at the online retailer, finds that the mobile phone is now both an obstacle and an enabler.
There are about 680 million mobile subscriptions across all of MENA as of 2014, a number that is expected to grow at an annual rate of about 6% in the coming years, reaching nearly one billion by 2020. And a major segment of those one billion mobile phone users will be between the ages of 18-35, who any e-tailer worth his salt must target and convert as loyal users.
“We are looking at mobile commerce in a big way. Online shopping in the region has been around for a decade…people have started buying products off their phones only in the last two years,” he says, explaining the newness of this space.
What the people working at his firm have found over the last two years is that more and more people, many of them falling under the ‘young’ segment, now browse and shop for their products on their phones. It’s a smaller but faster-growing number of online buyers.
That throws up the challenge of how to best display, recommend, and sell one product out of almost two million products on screens that are five inches small, run on data speeds that vary from 2G to LTE, to a person who could be sitting either in Cairo or Salalah.
“It’s a challenge. There are so many things that a mobile brings….it increases your geography…enables geolocations…recommendations…but we have to innovate to make the mobile shopping experience as comfortable as desktop shopping.
In February this year, Souq.com got a shot in the arm when it raised $275 million from a group that included existing investors—New York-based Tiger Global Management and Cape Town-based Naspers—and new participants including Standard Chartered Private Equity.
That funding, (at an estimated valuation of $1 billion) for what is essentially an amount equal to one billion dirhams, prompted local media to give Souq the moniker of the first Arab ‘Unicorn’—a term reserved for companies, especially tech startups, that are valued at $1 billion or more.
For Mouchawar, all that Unicorn talk is useless. It is far more important to him that he now has the financial muscle to tackle the challenge of m-commerce as he builds the Souq.com of tomorrow.
(This article is an excerpt from the August cover story of Inc. Arabia)