I think there is an untold story about the recent acquisition announcements of souq.com by Amazon and JadoPado by unknown local investors (speculation is Noon). Souq.com acquisition deal was so favorable to Amazon, Amazon stock gained close to $30Billion in market capitalization in less than one week after the announcement. Amazon acquired Souq for less than $650Million. A similar acquisition of a leading marketplace in the US would have gone for Billions of Dollars more. Souq.com was able to build a household brand across multiple countries, controlling 75% of the middle east consumers’ e-commerce, and more than 50Million visitors per month. Souq built a franchise with a payment gateway company, a shipping handling company, and many other assets. Taking into consideration the hard work Souq team had to put to build a leading e-commerce ecosystem in the middle east, Souq was valued at $1Billion a year ago with $270M of fresh investment. Something seriously should have gone wrong for Souq to sell at such a “cheap” price.
JadoPado acquisition was just announced. We loved the JadoPado platform, we kept following the amazing development and great designs created by a truly innovative team. We were excited about looking at hotcake. However, when we looked at the prices and the features they are stuffing to differentiate the various subscription plans. Local sellers don’t care about disk space, bandwidth, or the total number of listings. They want leads and they want to sell with the lowest overhead margin possible! The sad part of the story the marketplace was open one day and it just closed today without any prior warning to sellers. A lot of them may have depended solely on the platform to sell. Or it may just be that JadoPado is running for the cover because of Amazon’s arrival to the Middle East retailer commerce market. They may have learned the lessons from what happened when Amazon entered the Indian Marketplace with the “Take No Prisoners” attitude in dealing with competitors.