Exclusive Q&A: Souq.com CEO talks investments, expansion plans

Over the last 10 years, Souq.com has grown from a pioneer start-up to the Arab world’s largest e-commerce platform. The Dubai-based company last month secured AED 1 billion in its latest round of venture capital funding. Ronaldo Mouchawar, CEO and co-founder of Souq.com speaks to Argaam about expansions planned for this year, and job creation for Arab youth.

Q: The region’s e-commerce sector has become more crowded in recent years. How do you plan to differentiate your business from competitors?

A: It’s exciting times for the industry. We focus on the value we bring through technology and job creation, as well as connecting people to products through our retail and marketplace model. Through cutting edge technology, we enable our consumers to make smarter choices and access to mobile commerce is further empowering them.

To us, what’s more important is that we become a household brand, that when everyone is thinking of buying a product through their mobile, they would check Souq.com and see if they get the best value and the best selection. I would also like to think of us as a destination where young Arabs can come and find great jobs, innovate, and achieve their own professional ambitions.

Q: Souq.com has recently secured AED 1 billion in venture capital funding. Can you please elaborate on these plans?

A: The funding will be used to drive further growth by investing in technology, scaling our marketplace operations, launching new product categories and recruiting and retaining the best talent. We will be expanding our logistics and payments services to further enhance our customer experience and operations.

We also enable small to medium enterprises (SMEs) and entrepreneurs to start and grow their businesses online.

For marketplace specifically, we are aware that a huge number of SMEs/ Merchants are on mobile first rather than their PC/desktop. So, by investing in technology, we are empowering them via our mobile app that has an extensive feature that helps to streamline the selling process and offers a simple, yet powerful way of managing inventory, as well as keeping all financials and transactions in one place. 

Q: What are your targets for the Saudi market this year?

A: KSA is the biggest market for Souq.com. As the largest e-commerce platform in the region we are constantly innovating across our platform, improving logistics, investing in talent and technology, for example to ensure a better service we have doubled our fulfillment network in 40 cities across the Middle East.

Q: Cash-on-delivery (COD) is still the most dominant form of payment in Saudi Arabia and many other markets in the region. Do you expect COD to remain the norm in the near future?

A: The Middle East region overall has a dominant trend of cash usage for purchases. COD is still a major part of our business and this is necessary to build our customer’s trust and provide our customers with this option to pay if they feel this is the most convenient for them.  COD percentages vary from market to market. In some markets it can be +60 percent, whereas in others it can be up to 80 percent. Over the longer term, we believe COD percentage will come down but still there will be some of our customers who would prefer to use COD and we will therefore continue to provide this option.

Q: How would you describe the current e-commerce landscape in the Middle East and how has it changed in recent years?

A: The e-commerce market in the Middle East is growing very fast and is expected to reach $20 billion this year. Mobile commerce, or M-commerce, has also been a huge driver of e-commerce growth in last couple of years, both for Souq.com and the overall industry. M-commerce grew exponentially in 2015 and over 50 percent of our sales are driven by mobile shopping.

Write to Joumana Saad at joumana.saad@argaamplus.com