Amazon expands to Middle East with Souq.com buy

DUBAI - Tech giant Amazon expanded its global reach Tuesday with the announcement of a deal to buy Dubai-based Souq.com, the Middle East's largest online retailer.

The agreement, the financial details of which were not disclosed, brings Amazon into a fast-growing market as it continues to invest in its core retail network despite expanding into a wide range of services.

It appears competition was fierce to acquire Souq.com, with the Amazon deal announced just a day after Dubai-based Emaar Malls confirmed offering $800 million to acquire the site.

Amazon had walked away from talks with Souq.com earlier this year, but it reportedly came back with an offer of $650 million.

Founded in 2005 as an auction site, Souq.com has evolved into a retailer and a marketplace for third-party sellers.

In a joint statement announcing the agreement, the two companies said the deal would be finalized this year "subject to closing conditions".

Souq.com chief executive and co-founder Ronaldo Mouchawar called the agreement "a critical next step in growing our e-commerce presence on behalf of customers across the region."

"By becoming part of the Amazon family, we'll be able to vastly expand our delivery capabilities and customer selection much faster, as well as continue Amazon's great track record of empowering sellers," he said in the statement.

'SHARE THE SAME DNA'

Amazon senior vice president Russ Grandinetti said the deal made sense as both companies "share the same DNA".

"We're both driven by customers, invention and long-term thinking," he said.

"We're looking forward to both learning from and supporting them with Amazon technology and global resources."

Souq.com won a major vote of confidence last year and emerged as the highest-valued internet company in the region when it secured $275 million in funding from international investors to support its growth.

At the time, Mouchawar said the e-commerce market in the Middle East was "growing very fast" and expected to reach $20 billion in 2016.

Known for its huge online retail operations, Amazon has been expanding into areas including cloud computing and streaming video where it is trying to rival Netflix.

But online shopping remains at its core, with its retail operations taking in $26 billion in North America and $14 billion in the rest of the world in the last quarter of 2016.

Samih Toukan, the head of Jabbar Internet Group, an early investor in Souq, hailed the deal on Twitter, writing: "History is made".

He described the acquisition as the "biggest regional tech deal" since Yahoo! in 2009 purchased Maktoob, the first provider of Arabic email services.

Mouchawar launched Souq from within Maktoob, which he joined after he landed in the United Arab Emirates in 2000. Born in Syria, Mouchawar had studied engineering and worked for several tech companies in the United States.

"This is a milestone for the online shopping space in the region," he said in a later statement to staff posted on Souq.com's website.

"Over time, I'm excited for what this acquisition will mean for every customer across the region," he added.

In an interview with Al-Arabiya news channel, Mouchawar said he would remain as the chief executive of Souq.com, and that the company would keep its workforce.

Souq.com attracts over 45 million visits per month.

But the Middle East continues to have a "significant untapped e-commerce potential", according to a report last year by consultancy McKinsey, which put the region's e-commerce at around one percent of total retail.

source: news.abs-cbn.com

How online shopping site Zalora chooses brands

MANILA – Online shoppers can find some of the biggest fashion brands like Nike, Levi’s and Ray-Ban on online retailer Zalora. But how does Zalora determine which brands and specific products are sold on the site?

According to Zalora managing director Martin Cu, most of the products featured on the site are determined through extensive research and analysis of online user trends and patterns.

“One of the coolest things about Zalora is we really leverage big data in a way, so we get to know our customers based on what they like to browse, what they like to shop for, and then of course all of this informs our decision-making when it comes to what products make the website,” Cu told ANC’s “Shoptalk.”

“We do carry everything that our customers are looking for. We’d like to believe that we have everything at a price point that they want to pay for,” he added.

Zalora also carries brands like Calvin Klein, Mango, New Balance, Reebok, and The North Face. It also sells items under its own Zalora brand.

Cu said items being sold on the site, except for footwear, have an average price of P1,000.

While most of the items are targeted for the young shoppers, Cu believes that the older generation can also benefit from Zalora’s services because it “takes the hassle out of the shopping experience.”

Zalora is among the first brands to offer cash on delivery service online, which Cu said “has been a major enabler for e-commerce customers to shop online.”

Online shopping, however, does have its disadvantages such as not being able to touch and fit the items.

Cu considers this one of the biggest concerns of online shoppers, prompting Zalora to come up with ways to make the shopping experience more convenient to shoppers.

“We’ve introduced a number of innovative features exclusively available on Zalora. For example, we’ve recently launched our Fit Visualizer, which is a unique feature on the website where you can measure a piece of clothing that you own and like and then you can see how the item that you’re looking at fits against that item,” he said.

Zalora also has a 30-day return policy.

“If a customer is unhappy, we absolutely encourage every customer to send the item back,” said Cu.

Zalora is currently leading the efforts in organizing the country’s first “online shopping holiday” to be held on December 12.

Zalora has partnered with other e-commerce services including ADeals, Food Panda and Easy Taxi for the shopping event.

“We’re talking big discounts of up to 80 percent off for some of the big brands like Mango, River Island and even our in-house collection,” said Cu.

Zalora, which was launched in 2012, also has localized websites for Singapore, Malaysia, Indonesia, and Thailand.

In October, it opened its first physical store in Singapore.

source: www.abs-cbnnews.com

Gaming brings out Amazon's gentler side

SAN FRANCISCO - Amazon.com Inc, a company known for its ruthless drive, is courting the free-wheeling coders and dreamers of the gaming industry with a lighter touch as it seeks to break into an arena now dominated by Apple and Google.

The online retailer, infamous for undercutting rivals and pressuring suppliers, hopes that making nice with game developers will help it build a vibrant app platform on its new Fire TV and gain ground in an area where it severely lags the competition.

For example, Amazon last year contacted London-based developer Ashraf Hegab out of the blue. In contrast to the sink-or-swim style of Apple's and Google's app stores, Amazon promised to promote his game actively if he brought it to its platform, he said.

"With Amazon, it feels a lot more intimate and personal," said the founder of eight-month startup Playir. "With Apple, you get feedback, but it's a more formal Q&A. You feel like you're being judged."

Gaming is the top revenue generator and one of the top five activities on smartphones and tablets, and to catch up, Amazon must compete with rivals Apple and Google for users and developer time.

Last week, Amazon doubled down on its gaming strategy with Fire TV, a palm-sized $99 streaming device that also allows users to play games on their televisions and, executives hope, will help displace some of the millions of costlier Microsoft Xboxes, Sony Playstations and Nintendo Wiis in households.

For nearly 20 years, Amazon - a company that Chief Executive Jeff Bezos nearly named Relentless.com - has been anything but friendly in its drive to offer customers the lowest possible prices on everything from kitchen knives to diapers.

But game developers say Amazon has forged a bond with developers over the last two years by offering marketing support, feedback and other perks. It is building credibility by hiring respected veterans for its in-house gaming studio.

It has offered discounts on Amazon Web Services, the cloud computing service used by a majority of startups. And in some cases, it is even giving them money to test its ad services.

"We obsess about making that easier and easier – the tools that we provide, the support we give through our business development teams," Mike Frazzini, vice president of Amazon Games, told Reuters in an interview.

Some remain skeptical of the Fire TV's ability to go head-to-head with Apple TV, or edge out the top-selling PlayStation4.

Developers expect Apple to bring gaming to its streaming box. Its iOS platform already commands a large contingent of mobile app developers, a handful of whom have built billion-dollar companies.

There has yet to be a breakout game title or company from the Amazon platform like Finland's Supercell, whose two main titles - Clash of Clans and Hay Day - made $2.4 million a day in revenue last year. The Internet giant hopes to change that.

Amazon "has pissed off a lot of book publishers and others in e-commerce, but not developers as much," said Zaw Thet, a partner at Signia Ventures, which backs a number of game startups. "I don’t think Amazon really cares about making money through game revenue. They care about capturing your attention and up-selling you all of the products that have to do with that."

WILLINGNESS TO COLLABORATE

The iPhone's arrival in 2007 created a population of gamers addicted to affordable or free games played in bite-sized chunks of several minutes. Amazon thinks there's a market for the same sort of more casual game on the living-room TV, away from time-intensive "hard-core" console titles like "Call of Duty."

But it's unclear how strong demand will be. Ouya began selling its $99 Android game console last year but has had disappointing sales.

The startup is now working on taking its Ouya software as an app to set-top boxes and TVs, Chief Executive Officer Julie Uhrman told Reuters last week.

"The big question is where is the consumer demand for that because it's so easy to access those games in so many different ways," said David Cole, an analyst at DFC Intelligence.

Others warned not to dismiss the company that in two years has captured a significant share of the tablet market. Amazon has data on consumers' buying habits and their credit cards on file, making it easy to make in-app purchases, executives said.

"They understand customer relationships and one-click shopping and if you put in the technology section, there are lots of interesting capabilities to disrupt the space," said Kent Wakeford, chief operating officer of social and mobile game developer Kabam.

Developers designing games for Fire TV or considering it hope their apps will catch on with Amazon's estimated 240 million users. More than 800 million Android devices were sold in 2013 and because Amazon's platform is based on Google's software, it does not take much effort to adapt games to Amazon's app store.

Amazon has successfully jumped into new sectors before with the Kindle e-reader in 2007. By then, it had earned a reputation among book sellers for its ruthlessness.

Game developers say Amazon has so far demonstrated nothing but a willingness to collaborate and promote their games in ways Apple and Google do not.

Amazon recently gave some developers $500 to test its ad campaign tool, said VNL Entertainment founder Lucius Yu. They also gave him free Amazon coins for users to spend on purchases made within its "School of Chaos."

Amazon seems "more personable at the moment," said Tony Pereira of Flashman Studios, which helps developers market their business.

source: www.abs-cbnnews.com

Amazon founder Bezos to buy the Washington Post

Amazon.com Inc founder Jeff Bezos will buy the Washington Post newspaper for $250 million in a surprise deal that ends the Graham family's 80-year ownership and hands one of the country's most influential publications to the tech entrepreneur.

Bezos, hailed by many as a visionary who helped transform Internet retail, called his acquisition a personal endeavor and reassured Post employees and readers he will preserve the paper's journalistic tradition, while driving innovation.

The acquisition, the latest in a flurry of recent media deals including the New York Times Co's sale of the Boston Globe for $70 million, is a further indication of the unprecedented challenges newspapers face as advertising revenue and readership decline.

Shares of the Washington Post Co climbed more than 5 percent to $599.85 after hours - their highest level in almost five years.

"I understand the critical role the Post plays in Washington, DC and our nation, and the Post's values will not change," Bezos said in a letter addressed to employees and published on the newspaper's website.

"There will of course be change at the Post over the coming years. That's essential and would have happened with or without new ownership," he added. "We will need to invent, which means we will need to experiment."

Bezos, who has built Seattle-based Amazon.com into a shopping and online technology force over the last two decades, made a small foray into media earlier this year with a small investment in Internet news site Business Insider.

The Washington Post, home to journalists as the "Watergate" team of Bob Woodward and Carl Bernstein, is among the rapidly dwindling number of U.S. newspapers with a profitable business - a function of the rapid migration of readers to Internet and other digital media sources.

Warren Buffett owns a slice of its parent company, Washington Post Co, whose operating income has plummeted almost 40 percent since 2008, to $146.2 million in 2012.

"I doubt it is a financially oriented investment for him as much as a chance to play a more important role as a steward of an important public trust/asset," said James Barksdale, President of Atlanta investment firm Equity Investment Corp.

Barksdale said his firm did not own Washington Post shares because he thought they traded higher than he thought justified, "probably due to the Buffett halo," he added.

Bezos will buy the Post along with other newspaper assets from the Washington Post Co. Amazon.com is to be kept separate from the Post deal, according to the Washington Post.

The deal, which caught many industry watchers by surprise, was arranged in private by Allen & Co. It comes on the heels of near-unprecedented media deal activity this year, with the Globe transaction announced just over the weekend, the Tribune Co hiving off its publishing and broadcasting businesses and the Los Angeles Times reportedly up for sale.

GRAHAM FAMILY RELINQUISH THEIR CLAIM

Washington Post Chairman and Chief Executive Donald E. Graham, whose family owns the paper, explained his decision to part ways with the publication, which will continue to be headed on a daily basis by CEO Katharine Weymouth.

"As the newspaper business continued to bring up questions to which we have no answers, Katharine and I began to ask ourselves if our small public company was still the best home for the newspaper. Our revenues had declined seven years in a row," Graham said in his letter to employees.

"Jeff Bezos' proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post."

The transaction covers The Washington Post and other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.

Bezos is the world's 19th richest person with a fortune of $25.2 billion, according to Forbes magazine. His other major personal project is called Blue Origin, which aims to be one of the first non-government funded ventures to send people and cargo into space, potentially winning lucrative contracts that were once fulfilled by NASA.

Bezos has already spent millions of dollars on this project, with millions more in the pipeline.

He did not elaborate in great detail on his motivations behind his latest deal on Monday. But in 2009, when asked at the debut of the Kindle 2 whether the electronic-reader could help print media, Bezos said he thought there were "genuine opportunities" to save journalism.

"And we're excited about helping with that," he added, according to the International Herald Tribune.

source: www.abs-cbnnews.com