Amazon Is Reportedly Shelling A Billion Dollars To Enter The Middle-East

amazon_logoAmazon is reportedly looking to enter the Middle-East markets in a big way and, if rumors in financial dailies are to be believed, set to pay a $1 Billion for Souk.com.

The Middle-East is a curious market for online retailers and has proven difficult to crack for Amazon. The penetration of credit cards or other digital modes of payment is quite low and people tend to be wary of making their purchases online.

Souk.com, in fact, has a widespread network of prepaid cards that can be purchased from local shops and then used to make payments online. It is a unique solution to a payments problem although there is no doubt that Amazon will have to come up with others as well.

In India, for example, another massive market for Amazon, the company has adopted the local tradition of ‘cash on delivery’, where people make their purchases online and then pay for cash once the products have been delivered.

Amazon is a retail behemoth but a major part of its operations is still centered in the western world. China is also one of the markets where deeply entrenched local players have made it difficult for Amazon to get a foothold and so the importance of aggressively expanding in other regions is well understood by Amazon.

Amazon also brings with it an extensive knowledge of setting up efficient supply chains and complex delivery models. These are also things that are lacking in the Middle-East where a lot of areas are still out of the reach of online retailers because of remote locations or lack of accessibility.

There is no doubt that Amazon entering the market in a big way will change that.

This deal is not yet official and neither of the two parties involved has made an official statement as of yet but reputed financial institutions are already talking about like it is a done deal.

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