DUBAI: Amazon’s acquisition of online retail site Souq.com marks a “coming-of-age” of the Middle East ecommerce sector, technology experts said.
Souq plans to expand its workforce and operations after the US market leader clinched a deal to buy 100 percent of the Middle East player, executives from both firms said.
Amazon had walked away from talks with Souq.com earlier this year, but it reportedly came back with an offer of $650 million.
Amazon and Souq.com said earlier on Tuesday they had agreed on the takeover, despite an eleventh-hour bid by Dubai billionaire Mohamed Alabbar’s Emaar Malls to cut in with an offer it said was worth $800 million.
Executives have not disclosed the value of the Amazon deal, which adviser Goldman Sachs called “the biggest-ever technology M&A transaction in the Arab world.”
Sources with knowledge of the takeover said Amazon was paying less than Emaar’s offer, making it lower than Souq.com’s $1 billion valuation when it sought funding last year.
One source said Souq.com would have broken an exclusivity agreement with Amazon if it accepted Emaar’s bid at this stage.
“Amazon is a great fit with us. We have a lot of common values and it is all about innovation, technology and the type of customer experience and thinking that Amazon has,” Souq.com Co-Founder and Chief Executive Ronaldo Mouchawar told Reuters.
Technology expert Matthew Reed, practice leader for the Middle East and Africa at Ovum in Dubai, said that the deal was significant.
“The Amazon deal to buy Souq.com marks a coming-of-age moment for e-commerce in the Middle East,” Reed told Arab News.
“Currently, e-commerce in the region is less advanced than might be expected the given the relative affluence and high levels of broadband connectivity in the GCC states. But the arrival in the region of a global leader such as Amazon should help to develop and grow the e-commerce sector here.”
The deal will help grow an already major player in the Middle East online retail sector. Alabbar himself has advanced plans for the launch of Noon, slated as a $1 billion portal that will have a big initial focus on fashion and luxury products.
“Assuming the deal goes ahead, Noon will face tougher competition than it might have been expecting, as in Amazon it will be up against what many see as the world’s leading e-tailer,” Reed said.
P.K. Gulati, a Dubai-based technology investor, said that the Amazon-Souq deal was “awesome”.
“I think it’s great for the ecosystem — it’s great as a role-model deal, in the sense of people thinking that they can do it,” Gulati – who has made about 15 investments worldwide, mainly in Silicon Valley and India – told Arab News.
It was also remarkable given Amazon’s track record in business, he added. “Amazon has a reputation of not buying companies — rather, of making them.”
Gulati said that Alabbar’s unsuccessful 11th-hour bid for Souq simply came too late.
“Putting a counter-bid on a Friday was in my opinion probably too late… I think the deal was already done already by then.”
Noon may become a future player in the space, but such sites typically take some time to take off, Gulati added. It typically “takes three to five years for a platform to stabilize and become something which people like,” he said.
Souq.com, founded in 2005, stocks 8.5 million items on its website and generates about 50 million monthly visits, the site’s CEO Mouchawar told Reuters. It delivers to the six Gulf Arab states and Egypt.
Mouchawar said there was scope to expand the business with Amazon and to increase the 3,000-strong workforce to boost Souq.com’s reach, without saying by how many it would rise.
“We will continue to invest in our segment and grow our markets,” he said at Souq.com’s Dubai headquarters.
Despite its young, tech-savvy population, shoppers in the Middle East still prefer to shop in stores. Online retail accounts for less than 1 percent of total sales in the Middle East, according to market researcher Euromonitor International.
“We want to figure out how to grow the team here. If we’re going to grow the business we have to grow logistics, we have to grow technical development,” Amazon Senior Vice President Russ Grandinetti said.
In a deal document seen by Reuters, Goldman said the acquisition would accelerate Amazon’s entry into “attractive Middle East countries with significant growth potential.”
After the Amazon takeover, Middle East consumers will be able to buy products available on Amazon.com through Souq.com, and Middle East merchants will have access to a wider market via Amazon’s network.
The acquisition is expected to close later this year.
Souq.com’s current shareholders include South Africa’s Naspers Ltd. and Tiger Global Management.
The Amazon deal was backed by the Dubai government, which wants to use technology to expand its regional retail footprint.
Dubai’s Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum said in a statement it showed the city state’s position “as a regional and global hub for the world’s biggest and leading organizations.”
Amazon’s acquisition of Souq.com is seen as significant for the Middle East’s nascent tech sector.
“This is effectively a vote of confidence in the region. You have a major American company going into a digital company in the region,” said Fadi Ghandour, founder Dubai-listed logistics firm Aramex and a prominent venture capitalist in the Middle East.
— With Reuters
Amazon deal to buy Souq.com a ‘coming-of-age’ of Mideast ecommerce
Amazon deal to buy Souq.com a ‘coming-of-age’ of Mideast ecommerce
Why BCG’s involvement in Gaza marks an all-time low for consulting firms
- FT investigation examined Boston Consulting Group’s role in Gaza aid planning, including plans for Palestinian relocation
- BCG has disavowed the work and fired two senior partners — but the scandal sheds light on the wider industry’s irresponsibility
LONDON: A Financial Times investigation, published on July 4, found that a consulting firm connected to the Gaza Humanitarian Foundation secured a multimillion-dollar contract to help shape the initiative and a proposal for the possible “relocation” of Palestinians from the Gaza Strip.
The Boston Consulting Group was found to have played a central role in designing and managing the US- and Israeli-backed project, which aimed to replace the UN as the primary coordinator of humanitarian aid in Gaza.
Amid growing criticism, BCG denied any ongoing involvement in the Gaza Humanitarian Foundation. In a June 7 statement, the firm said it initially provided “pro bono support” in October 2024 to help launch “an aid organization intended to operate alongside other relief efforts.”
The firm said two senior US-based partners who led the initiative “failed to disclose the full nature of the work” and later engaged in “unauthorized” activities outside the firm’s oversight.
“Their actions reflected a serious failure of judgment and adherence to our standards,” the firm said. “We are shocked and outraged by the actions of these two partners. They have been exited from the firm.
“BCG disavows the work they undertook. It has been stopped, and BCG has not and will not be paid for any of their work.”
The company emphasized it is strengthening internal controls to prevent future breaches. “We deeply regret that in this situation we did not live up to our standards,” the statement said. “We are committed to accountability for our failures and humility in how we move forward.”
FAST FACTS:
• A Financial Times investigation examined BCG’s role in Gaza aid planning, including controversial proposals for Palestinian relocation.
• BCG disavowed the work and fired two senior partners, but documents suggest deeper involvement and lapses in internal oversight.
• The scandal underscores wider concerns about consulting firms’ ethics, with similar controversies involving PwC, KPMG, EY and McKinsey.
Following the FT story, BCG issued another statement on July 6 disputing aspects of the reporting. “Recent media reporting has misrepresented BCG’s role in post-war Gaza reconstruction,” the firm said.
BCG reiterated that the initiative was not an official company project and was carried out in secret. “Two former partners initiated this work, even though the lead partner was categorically told not to,” the statement read.
“This work was not a BCG project. It was orchestrated and run secretly outside any BCG scope or approvals. We fully disavow this work. BCG was not paid for any of this work.”
However, individuals familiar with “Aurora” told the FT that BCG’s involvement ran deeper. The report revealed that BCG created a financial model for Gaza’s postwar reconstruction that included scenarios for mass displacement.
This revelation intensified scrutiny of the consulting industry’s ethical boundaries.
“Consulting companies… are held to a higher standard of professionalism and ethics than other lines of work,” Dr. Abdel Aziz Aluwaisheg, the Gulf Cooperation Council assistant secretary-general for political affairs and negotiation, wrote in an April opinion piece for Arab News.
He warned that without corrective action, major firms risk alienating clients.
ndeed, in recent years, top consulting firms like McKinsey, PwC, KPMG, and EY have faced growing scrutiny for putting profit over ethics, with scandals revealing conduct lapses worldwide.
McKinsey, for instance, faced heavy backlash for its role in the US opioid crisis. The firm was accused of helping Purdue Pharma and other manufacturers to aggressively market addictive painkillers, including OxyContin, The New York Times reported.
Aluwaisheg noted in his op-ed that some of these ethical lapses “are quite common throughout the consulting business.”
However, he added, “big firms are more likely to commit them,” citing sprawling operations that limit senior management oversight.
The industry’s core business model may be the issue: consulting firms adopted law firms’ high-fee model for expert advice — without their legal liability.
Despite this, demand for consulting services remains high. Aluwaisheg believes governments and businesses will continue to need outside expertise.
Still, accountability concerns have prompted some governments to take action. In February, Saudi Arabia’s Public Investment Fund banned PwC from taking on new advisory and consulting contracts for one year.
Some media outlets reported that the decision was related to an ethical violation tied to an alleged recruitment of a senior-level employee from the client’s side. The suspension did not impact PwC’s auditing work.
These events highlight ongoing concerns over consulting firms’ roles in controversial actions. In April 2024, KPMG’s Dutch arm was fined $25 million after over 500 staff cheated on internal training exams, Reuters reported.
Yet the BCG case may represent a new low for the industry.
The Gaza Humanitarian Foundation’s model bypassed traditional organizations like the UN, restricted aid distribution to limited sites under Israeli oversight and relied on private security contractors. This move has had deadly consequences.
According to Gaza’s health authority, at least 740 Palestinians have been killed and almost 4,900 injured while attempting to reach aid centers, drawing condemnation from humanitarian organizations and UN officials.
UN aid chief Tom Fletcher called the initiative a “fig leaf for further violence and displacement” of Palestinians in the war-torn enclave.
In a July 10 letter to the FT editor, BCG’s CEO Christoph Schweizer pushed back against the allegations that his firm endorsed or profited from projects related to Gaza.
“None of that is true,” Schweizer wrote, adding that “a few people from BCG were involved in such work. They never should have been.”
Adding another layer to the controversy, FT reported on July 6 that staff from the Tony Blair Institute were also implicated in postwar planning that included scenarios for mass Palestinian displacement — despite being prominent advocates for peace in the Middle East.
The plan, seen by the FT, imagined Gaza as a regional economic hub, complete with a “Trump Riviera” and “Elon Musk Smart Manufacturing Zone,” based on financial models developed by BCG.
While the Tony Blair Institute for Global Change denied authoring “The Great Trust” blueprint, it acknowledged two staff joined Gaza planning calls and chats. It also denied backing population relocation.
Arab News approached the TBI for comment, but did not receive a response by the time of publication.
Nevertheless, its involvement has triggered additional concerns about the ethics of postwar reconstruction planning and the role of consulting firms in shaping policies with far-reaching humanitarian consequences.
Syrian, Israeli officials meet in Baku: Diplomatic source in Damascus
- Meeting marked major step for two countries which have been foes for decades
DAMASCUS: A Syrian and an Israeli official met face to face in Baku Saturday on the sidelines of a visit to Azerbaijan by President Ahmed Al-Sharaa, a diplomatic source in Damascus said.
The meeting marked a major step for the two countries which have been foes for decades, and comes after Israel initially cold-shouldered Al-Sharaa’s administration as jihadist because of his past links to Al-Qaeda.
“A meeting took place between a Syrian official and an Israeli official on the sidelines of Al-Sharaa’s visit to Baku,” the source said, requesting anonymity because of the sensitivity of the issue.
Israel is a major arms supplier to Azerbaijan and has a significant diplomatic presence in the Caucasus nation which neighbors its arch foe Iran.
Al-Sharaa himself did not take part in the meeting, which focused on “the recent Israeli military presence in Syria,” the source added.
After the overthrow of longtime ruler Bashar Assad in December, Israel carried out hundreds of air strikes in Syria to prevent key military assets falling into the hands of the Islamist-led interim administration headed by Al-Sharaa.
It also sent troops into the UN-patrolled buffer zone that used to separate the opposing forces in the strategic Golan Heights, from which it has conducted forays deeper into southern Syria.
Al-Sharaa has said repeatedly that Syria does not seek conflict with its neighbors, and has instead asked the international community to put pressure on Israel to halt its attacks.
His government recently confirmed that it had held indirect contacts with Israel seeking a return to the 1974 disengagement agreement which created the buffer zone.
Late last month, Foreign Minister Gideon Saar said Israel was interested in striking a peace and normalization agreement with Syria.
A Syria government source quoted by state media responded that such talk was “premature.”
But during a visit to Lebanon this week, US special envoy to Syria Tom Barrack said: “The dialogue has started between Syria and Israel.”
After meeting Al-Sharaa in Riyadh in May, US President Donald Trump told reporters he had expressed hope that Syria would join other Arab states which normalized their relations with Israel.
“(Al-Sharaa) said yes. But they have a lot of work to do,” Trump said.
During his visit to Baku, Al-Sharaa held talks with his counterpart Ilham Aliyev, the two governments said.
Azerbaijan announced it would begin exporting gas to Syria via Turkiye, a key ally of both governments, a statement from the Azerbaijani presidency said.
5 children playing soccer killed in Yemen explosion
- Two local residents who were eyewitnesses, Ahmed Al-Sharee and Khaled Al-Areki, said that the children were playing soccer when the explosion happened
ADEN: Five children in southwestern Yemen died after an explosive device detonated in a residential area where they were playing soccer, rights groups and eyewitnesses said on Saturday.
The circumstances surrounding their deaths on Friday night in Al-Hashmah subdistrict of Taiz province remain unclear.
A spokesperson for the United Nations children’s agency UNICEF said that they are aware of reports about the incident but can’t verify the facts at the moment.
Two local residents who were eyewitnesses, Ahmed Al-Sharee and Khaled Al-Areki, said that the children were playing soccer when the explosion happened.
At least three people with minor to moderate injuries were also taken to the hospital.
Mahmoud Al-Mansi, another eyewitness, said the explosive was directed from an area where forces allied with the Islah party were present.
The Yemen Center for Human Rights condemned the incident in a report that included graphic photos of the children’s torn bodies. Citing health care sources at Al-Rafai Hospital, where the victims arrived unresponsive, the group said they died from shrapnel injuries.
Two of the children were 12 years old, while two others were 14 years old, according to the group. The age of the fifth child is unknown.
US envoy Tom Barrack clarifies Syria comments, denies they were threat to Lebanon
- Reports cited Barrack warning that Lebanon risked “going back to Bilad Al-Sham”
- Syrian government also moved to quash speculation that it was planning escalatory steps against Lebanon
LONDON: US Special Envoy Tom Barrack has sought to clarify remarks made during his recent visit to the region, saying that his comments praising Syria’s progress were not intended as a threat to neighboring Lebanon.
“My comments yesterday praised Syria’s impressive strides, not a threat to Lebanon,” Barrack posted on X on Saturday.
“I observed the reality that Syria is moving at light speed to seize the historic opportunity presented by @POTUS’ lifting of sanctions: Investment from Turkiye and the Gulf, diplomatic outreach to neighboring countries and a clear vision for the future. I can assure that Syria’s leaders only want coexistence and mutual prosperity with Lebanon, and the US is committed to supporting that relationship between two equal and sovereign neighbors enjoying peace and prosperity,” he added.
The clarification comes after reports in Lebanese media, including from MTV Lebanon, cited Barrack as warning that Lebanon risked “going back to Bilad Al-Sham” if it failed to act quickly on regional realignment.
The term Bilad Al-Sham, historically referring to Greater Syria, encompasses present-day Syria, Lebanon, Jordan and Palestine under the Ottoman Empire; a sensitive concept in Lebanon given fears over sovereignty and outside interference.
Barrack’s comments were widely interpreted by some local outlets as a warning that Lebanon could fall under renewed Syrian influence if it failed to align with shifting regional dynamics.
Meanwhile on Saturday, the Syrian government also moved to quash speculation that it was planning escalatory steps against Lebanon over the issue of Syrian detainees held in Lebanese prisons.
A Syrian Ministry of Information official said that the detainee issue remains “a top priority” and that Damascus is committed to resolving it “swiftly through official channels between the two countries.”
Earlier reports had cited unnamed sources close to the Syrian government suggesting that diplomatic and economic retaliation was under consideration in response to what Damascus saw as Lebanon’s neglect of the detainees’ plight.
However, the Information Ministry source denied this, saying there were no such plans and reaffirming Syria’s commitment to bilateral resolution.
In an interview with Arab News on Friday, Barrack had made remarks reflecting growing US concern over Lebanon’s political inertia and the evolving role of Hezbollah.
“If Lebanon doesn’t hurry up and get in line, everyone around them will,” Barrack warned, pointing to a broader regional shift sparked by the lifting of US sanctions on Syria.
He framed the moment as pivotal for Lebanon, with pressure mounting for a new political order.
Addressing questions about Hezbollah’s future, Barrack said the group consists of “two parts,” an Iran-backed militant faction designated as a terrorist organization, and a political wing operating in Lebanon’s parliament.
He added that any disarmament process “must be led by the Lebanese government, with the full agreement of Hezbollah itself.”
Barrack said: “That process has to start with the Council of Ministers. They have to authorize the mandate. And Hezbollah, the political party, has to agree to that. But what Hezbollah is saying is, ‘OK, we understand one Lebanon has to happen.’ Why? Because one Syria is starting to happen.”
On Syria, Barrack described the lifting of sanctions on May 13 as a “strategic fresh start” for the war-ravaged nation and said that the US was not intending to pursue “nation-building or federalism.”
He called the Middle East a “difficult zip code at an amazingly historic time,” and told Arab News that the Trump administration’s new approach was designed to offer “a new slice of hope” to the Syrian people.
“President (Trump)’s message is peace and prosperity,” he said. “Sanctions gave the people hope. That’s really all that happened at that moment.”
Fuel shortages in Gaza at ‘critical levels,’ UN warns
- Seven UN agencies said in a joint statement that “fuel is the backbone of survival in Gaza”
GENEVA: The United Nations warned Saturday that dire fuel shortages in the Gaza Strip had reached “critical levels,” threatening to further increase the suffering in the war-ravaged Palestinian territory.
Seven UN agencies said in a joint statement that “fuel is the backbone of survival in Gaza.”
Fuel was needed to “power hospitals, water systems, sanitation networks, ambulances, and every aspect of humanitarian operations,” they said, highlighting that bakeries also needed fuel to operate.
The besieged Palestinian territory has been facing dire fuel shortages since the beginning of the devastating war that erupted after Hamas’s deadly attack inside Israel on October 7, 2023.
But now “fuel shortage in Gaza has reached critical levels,” warned the agencies, including the World Health Organization, the World Food Programme and the humanitarian agency OCHA.
“After almost two years of war, people in Gaza are facing extreme hardships, including widespread food insecurity,” they pointed out.
“When fuel runs out, it places an unbearable new burden on a population teetering on the edge of starvation.”
The UN said that without adequate fuel, the agencies that have been responding to the deep humanitarian crisis in a territory swathes of which have been flattened by Israeli bombing and facing famine warnings, “will likely be forced to stop their operations entirely.”
“This means no health services, no clean water, and no capacity to deliver aid,” the statement said.
“Without adequate fuel, Gaza faces a collapse of humanitarian efforts,” it warned.
“Without fuel, bakeries and community kitchens cannot operate. Water production and sanitation systems will shut down, leaving families without safe drinking water, while solid waste and sewage pile up in the streets,” it added.
“These conditions expose families to deadly disease outbreaks and push Gaza’s most vulnerable even closer to death.”
The warning comes days after the UN managed to bring fuel into Gaza for the first time in 130 days.
While a “welcome development,” the UN agencies said the 75,000 liters of fuel they were able to bring in was just “a small fraction of what is needed each day to keep daily life and critical aid operations running.”
“The United Nations agencies and humanitarian partners cannot overstate the urgency of this moment,” they said.
“Fuel must be allowed into Gaza in sufficient quantities and consistently to sustain life-saving operations.”
