E-commerce
Introduction
E-commerce is a game changer when it comes to the development of industries and revolution of marketing and business operations in the modern business environment (Fang, et al., 2014). The integration of technology in the marketing and business processes has bridged various difficulties that companies were strategizing on such as customer reach and feedback. E-commerce offers companies the benefit of ensuring that all its products are within the same platform and customers can interact with the company at a level that they feel their issues can be solved. Souq.com is one of the upcoming giants in the e-commerce sector with only a few years in the market and already making significant changes in terms of the brand and image it represents. This research paper focuses on Souq.com using a form of interview to determine the business model of the company and the far it has come, and possibly the future of the company.
Company Information
The company Souq.com was established in 2005 as a combined project of Mouchawar Ronaldo. The name ‘Souq’ refers to marketplace in Arabic, which is a vision that Mouchawar wanted to accomplish. His goal was to create a marketplace that allowed the small companies and shops in Middle East expand their operations. At the establishment of Souq.com, the business operated as an auctioning site and linked to the Maktoob portal. At the same time, the business focused largely on electronics only. With the craze at the time for mobile phones among the youths, Souq.com was the major center for purchasing high end phones and others electronics giving the company a significant boost in terms of financial returns. The financial success triggered the need for changing the business operations. In 2009, Souq.com cut its ties with Maktoob and in 2011; the company adopted the fixed-price model while converting its operations to online shopping. This was a major move for the company as it introduced retailing within its platform. This was the breakthrough of the company with the success exhibited by the far the company has come from an auctioning company to a business that sells nearly 8 million products that are distributed among 31 categories and consumer-based.
The business is established as a B2C (Business-to-Consumer), which is established to help the company relate directly to its customers within the market. As such, the business model of the company has established customer segments that make the model multisided. There are two interdependent customer segments. The first segment is composed of businesses that are selling the products. These include the small and medium enterprises, distributors, merchants, and brands. They provide the products to be marketed. The other segments are the consumers within the region. All the products on the website are targeted to a particular consumer within the market.
The business model also focuses on the development of value in the products offered to customers. In its value proposition model, the company offers its customers risk reduction, accessibility, brand, and convenience.
Risk reduction is attained through the integration of security standards and high safety systems. Customers who purchase a product and find it faulty or not functioning have a 15-day window to return the product. The company assumes the responsibility of the costs incurred in return shipping. When the product is returned and considered to have been different from what was ordered, counterfeit, defective, or damaged, the company offers the customer refund amounting to the value of the product. In order to reduce these cases, customers are encouraged to make a report of the seller who sold them bad products. Accessibility is attained through allowing the small businesses get to connect with customers who are not physically able to visit in person their shops. Firms that have trouble connecting with a larger market are offered the benefit of availing their products in a platform that markets and connects them to the potential customers.
The brand is attained especially for the small businesses through the association of the businesses with Souq.com. Souq.com is called ‘the Amazon of Saudi Arabia,’ which is due to the similarity in approach of business. However, the name is due to the continued growth that it is continually establishing as a business. Currently, it has operational stores in India, UAE, KSA, Egypt, Kuwait, and Jordan. With the huge range of products availed to the customers, the business has the prospect of continuing to grow. Lastly, convenience is attained through the integration of flexible modes of payments for the customers. The company has established partnerships with various banks within the UAE that allows 0% charge within 3-12 months. However, for customers to quality for this option, there is a minimum amount set that they should spend. There also are pre-paid cards at its stores that allow customers to purchase the products at the store easily.
Industry, Products, Customers, and Size
Souq.com is in the E-commerce industry. The e-commerce industry represents the business operations that include the purchasing and selling of goods/ services using electronic networks as the option for transmitting data and funds between the buyer and the seller. There are two business transactions that e-commerce businesses support; these are B2C (Business-to-Consumer) and B2B (Business-to-Business). Souq.com qualifies in this industry due to its main operational processes being selling and purchasing of products between the customer and seller using the internet. At the same time, the main mode of payment for the business is E-wallets, but as a way of increasing convenience and accessibility on the side of customers, there are options of using payment cards and cash-on-delivery.
There is a wide variety of the products being provided by Souq.com to its customers. The categories include apparels (Shoes and Accessories), art crafts/ collectibles, baby products, beauty products, bed/ bath products, books, cameras, coins/ stamps (paper money), computer products (inclusive of networking components). There also are optics products, electronics, grocery (food and beverages), furniture, outdoor products, gaming products, home appliances, home décor/ furniture, kitchen appliances, home supplies, office products, jewelry/ accessories, mobile phones/ tablets, and music/ movies (Souq.com, 2018). Additional product categories include sport/ fitness, pet food/ supplies, perfumes, toys, home improvement tools, wearable technology devices, and vehicle parts/ accessories (Souq.com, 2018).
The business has operational stores in 6 regions, which increases its reach to the customers and huge information on customer preferences within these regions. In all these regions, the company has established a positive marketing experience for the customers, which also is a motivation and influence for its continued growth. Customers vary in age from children to adults considering that the products being sold are for all ages. Restrictions are, however, placed in the age of the consumers accessing the website since payment has to be verified using the available modes of payment.
Benefits/ Value of IS to the Organization
Information system is the primary factor for the success of Souq.com. IS allows the company to connect with the sellers within UAE and advertise their products to the world. This not only increases the recognition of the sellers, but also Souq.com itself as it gets to showcase its capability in terms of operations to the globe. On the other hand, IS also allows Souq.com to establish a connection with its customers. Operating as an e-commerce business, IS allows the business to advertise its products to the customers allow them to place orders and receive the products in their home if they would prefer. Therefore, IS controls the operations of Souq.com, helps it develop its brand, and even expand its business reach within the market. At the same time, it continues to offer opportunities that Souq.com can invest in to expand in its operations within the defined markets.
References
Fang, Y., Qureshi, I., Sun, H., McCole, P., Ramsey, E., & Lim, K. H. (2014). Trust, Satisfaction, and Online Repurchase Intention: The Moderating Role of Perceived Effectiveness of E-Commerce Institutional Mechanisms. Mis Quarterly, 38(2), 2-7.
Souq.com. (2018). Shop All Categories. Retrieved from Souq.com: https://uae.souq.com/ae-en/shop-all-categories/c/?ref=nav