The 5 minutes Decision Behind Amazon’s Acquisitions of Souq.com
The acquisition of Souq.com by Amazon embodies how Mohammed bin Rashid’s ambitions brought to life on Dubai soil after 20 years.
“Within five minutes, I was able to secure an official approval for the largest Middle Eastern e-commerce deal of its time. Despite its significance, the decision was made quickly, categorically, and effectively, demonstrating the UAE government’s agility and speed in making a decision.”
In November of 2016, a member of my team called to tell me that Jeff Bezos wanted to meet with me for a cup of coffee. I was excited about the prospect as I had never met him before. The meeting took place in my office at Emirates Towers where he discussed his intentions in acquire Amazon’s “Souq.com” based in Dubai Internet City and his desire to gain the UAE government’s clearance to continue forward with the deal, and humbly stated that he is willing to leave ample time for the government to discuss the subject, over a month or two or more if necessary.
Jeff Bezos and Mohammad Al Gergawi
I left the meeting and called His Highness Sheikh Mohammed bin Rashid Al Maktoum to inform him that I was sitting with Jeff Bezos who wanted to obtain the UAE government’s approval to purchase Souq.com. After a few seconds, His Highness made his decision, saying, “Mohammad! the UAE economy is open; we do not close our doors to any investor who wants to invest in companies located in the UAE.” His Highness’ was delighted that the UAE market has attracted international investors.
After His Highness gave his blessing to the plan, I called His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum to advise him of the agreement, which he welcomed.
Then I went back to the meeting room and informed Bezos of the government’s decision; he was taken aback by the speed with which the country’s decision-making process moves. This refers to the general principle through which the UAE government approaches the decision-making process. What should have taken a month or two had passed in only 5 minutes. Who knows how long such a decision would have taken in a country other than the United Arab Emirates! With these words, His Excellency Mohammad Al Gergawi, the UAE Minister of Cabinet Affairs, told the story behind Amazon’s acquisition of Souq.com during a lecture he gave at the Mohammed bin Zayed Majlis titled “The Science of Decision-Making…Mohammed bin Rashid, a role model.”
In his speech, he noted that the Dubai-based e-commerce company, which was founded in 2005, is one of the largest success stories to emerge from Dubai Internet City, which was established in 1999 as part of Sheikh Mohammed bin Rashid Al Maktoum’s plan to transform Dubai into a global business and technology hub.
The government’s approach to decision-making
For decades, the UAE government has followed a consistent approach that relies on speed and flexibility in decision-making and a willingness to adapt to the changing environment. “Countries today are not measured by their size or strength. Fast-acting nations will continue to flourish and influence the world whereas slow-acting nations will disappear from the map of global influence. Because of this, the UAE has made enormous progress in only 50 years…from nothing to everything,” Al Gergawi added. ” Accordingly, it is important to point out that in the United Arab Emirates speed is not just restricted to making decisions, but also implementing them and turning plans into reality on the ground.
The UAE’s decisions are not just rapid, but also forward-thinking. Amazon’s acquisition of Souq.com is the result of Sheikh Mohammed bin Rashid’s foresight in establishing Dubai Internet City in 1999, when the Internet was new and at the height of its bubble and newspapers’ criticism of its use was growing.
Jeff Bezos listens to an explanation on the most recent breakthroughs in Dubai’s future accelerators in the presence of Mohammad Al Gergawi
These criticisms did not deter His Highness’ decision, but rather fueled his determination to implement and complete the project in less than a year. This project drew the attention of doubters of the Dubai development initiative at the time, and speculations began to circulate: Where is Dubai going with these projects? However, the projects’ overwhelming success demonstrated such visions were on the right track. As a result, Dubai became the Middle East’s Silicon Valley, and the UAE became the Arab world’s capital of the knowledge economy. This has provided the region with a new narrative that is full of hope and optimism, especially in the eyes of young people, despite the wars and conflicts that have torn them apart and set them back tens or even hundreds of years.
In less than 20 years, Dubai Internet City became a home and a platform for young innovators to start their enterprises, making it possible for them to realize their dreams. Because of His Highness Sheikh Mohammed bin Rashid Al Maktoum’s actions, Dubai has been dubbed the “land of dreams and opportunity.” A new reality for Arab youth, one that has made them a part of the Arab Emirati dream, which sees growth and development as the sole weapon for progress in the next phase.
Along with Souq.com, other success stories for companies worth a billion dollars, or “Unicorns,” emerged from Dubai Internet City, including the acquisition of “Careem” by “Uber” for 11 billion dirhams, and the “Media.net” sale for 3.3 billion dirhams, and all of this was accomplished because His Highness thought that countries have the right to dream big and have big plans.
Jeff Bezos listens to an explanation on the most recent breakthroughs in Dubai’s future accelerators
Jeff Bezos discusses his experience with the UAE government
Following the meeting, during which Jeff Bezos expressed his admiration for the UAE government’s work model, Al Gergawi escorted him on a tour of a number of institutions in Emirates Towers in the presence of several government officials, where he visited the Dubai Future Accelerators, the Dubai Future Foundation, and District 2071, all of which are working to address urgent technological challenges and develop innovative solutions.
He was also briefed on the UAE government’s experience in implementing the technological advances to create the future, as well as the government’s initiatives to promote entrepreneurs and start-ups.
After receiving official approval, Amazon initiated discussions to purchase Souq.com. In March 2017, Amazon stated that an agreement had been reached to finalize the sale, with a reported value of $580 million, with the goal of bolstering the global e-commerce giant’s footprint in the region. Souq.com had 45 million monthly visitors when Amazon bought the company, and it had operations centers in Saudi Arabia, the United Arab Emirates, and Egypt.
Boosting the digital economy
Startups have aided in the promotion of the digital economy, leading the digital revolution in Dubai and the United Arab Emirates, and expanding its contributions to the national economy by stimulating innovation in a variety of sectors. The government introduced the portfolio of the digital economy and remote work applications, within the tasks of the Minister of Artificial Intelligence, in July last year, emphasizing the role of the digital economy in the growth and development of new economic sectors and enhancing the country’s competitiveness in the global market and in the future economy. While the contribution of the digital economy reached 4.3 percent of the country’s GDP in 2019, a Minister of State for this portfolio was appointed to double this number.
The digital economy has demonstrated its effectiveness and the world’s need for it during the global pandemic. The state’s interest in it is part of the country’s plans to develop the government work system for the post-“Covid 19” era, particularly in light of the growing strategic role of the digital economy, smart technology, and remote work applications in assisting in managing work in the country for various sectors, moving the economy’s wheels, and organizing the movement of supply chains locally and internationally, efficiently, and effectively.
Jeff Bezos listens to a presentation on an innovative technology at the Dubai Future Foundation
Open Economy Policy
The UAE has had an open economy policy since the beginning, and in recent years it has adopted a series of procedures, laws, and regulations aimed at boosting commercial activity, increasing foreign investment volume, and attracting promising companies and investors from around the world. This includes economic stimulus packages and the permanent golden residence system for foreign investors, the virtual work program, the five-year residency visa for entrepreneurs, and the decision to award Emirati citizenship to a selected group of foreigners.
The UAE Future Accelerator
If there are accelerators for countries, then the UAE is the fastest country in building a civilized human miracle. The leadership in the UAE was clever, foreseeing the future, living in the future, and building projects on the ground from dreams out in the universe. This is what we are reaping today as a result of the state’s reliable global position, as well as its leadership indices of competitiveness in numerous sectors.