Amazon appears to have found its next area for e-commerce expansion: the Middle East.
CNBC reports that Amazon has been reaching out to large third-party sellers in North America, telling them about the chance to reach customers in the United Arab Emirates and later Saudi Arabia. A Middle East expansion could be lucrative for Amazon, but also comes with plenty of complications.
Amazon CEO Jeff Bezos also owns the Washington Post, which employed columnist Jamal Khashoggi at the time he was killed by agents of the kingdom of Saudi Arabia last year. Bezos himself has been quiet on the matter, but the Washington Post reported out the details as a cover-up, which stoked a campaign to boycott Amazon and its subsidiary Souq in Saudi Arabia.
Amazon did not immediately return a request for comment.
CNBC also notes the Middle East could be a risky market because of its dependence on oil. The volatility of global markets and fears of slowdown caused Saudi Arabia’s economy to shrink in 2018 for the first time in close to a decade.
Amazon already has a footprint in the Middle East. Amazon Web Services will open its first region in the Middle East early this year. One of Amazon’s biggest acquisitions came in 2017 when it bought Dubai-based e-commerce company Souq — sometimes referred to as the Amazon of the Middle East — for $580 million.
CNBC reports that Amazon’s potential Middle East expansion puts the future of Souq in question. Amazon is telling North American sellers not to sign up to sell on Souq because the company plans to shift that inventory to its own site, per CNBC.
Amazon has shown willingness to plow significant resources into its international expansions. India has been the most notable example, with the company investing billions to compete with local e-commerce companies and U.S. rivals.