Ronaldo Mouchawar is arming with more money, fresh talent, and better tactics for its march to e-commerce domination in the MENA region.

Ankush is a journalist hailing from India, who has edited and written for publications in his home country, the UAE, US, and UK. Previously the editor of Gulf Business in Dubai and of Entrepreneur in India, Ankush is a keen student of economics, a follower of Manchester United since 1996 and a disciple of Archer.

It’s late afternoon when I arrive at the offices in Ibn Battuta Gate, a typically Dubai-like development of offices packaged together with a hotel and a mall. I normally pick afternoons for interviews—I wager that most executives are far more relaxed with some lunch in them and their morning emails done with.

No such luck this time.

The cavernous offices at Souq are buzzing with activity. The main reception is crowded with people, some who look like vendors, others who give out that nervy-candidate-here-for-a-job vibe. The receptionist makes us wait as she registers guests on their entry system while simultaneously fielding a few hundred phone calls a minute.

Not a soul looks like he has had the chance to check his Instagram account today.

And then, just as we are done with our formalities, I sight Ronaldo Mouchawar, the Syrian-origin CEO & co-founder at, running out of a cabin when someone catches up with him to remind him of our meeting.

Looking disheveled and harrowed, Mouchawar is every bit the entrepreneur stuck in the daily grind. It clearly has been a longer day for him and it does not look like it’s ending soon. Quickly getting in a word with some of his other colleagues, Mouchawar then excuses himself to delay our meeting for lunch—at 4 pm. Who can grudge him that?

“It gets hectic,” understates Mouchawar when we finally sit down after what I can assume was a very quick bite, with a side of another meeting. How does he ever de-stress?

“Two things keep me sane,” he says. “The outdoors, like the beach, where I can stay off the phone. And basketball. I play it and I watch it. I get up early and there is always some basketball on at that time [US basketball, with the time difference]. As I read my emails, I keep one eye on the game,” he says, not noticing his mild confession of how work finds its way to him even in his most private time.

It is no surprise though that he is overwhelmed with work at the helm of Souq, a regional internet giant that sells almost 1.5 million products across 30 odd categories in the Middle East and North Africa (MENA).

The retailer claims that it attracts almost 45 million visits per month, with over 10,000 merchants selling their wares on the site.

In February this year, it got another shot in the arm when it raised $275 million from a group that included existing investors—New York-based Tiger Global Management and Cape Town-based Naspers—and new participants including Standard Chartered Private Equity. That funding, (at an estimated valuation of $1 billion) for what is essentially an amount equal to one billion dirhams, prompted local media to give Souq the moniker of the first Arab ‘Unicorn’—a term reserved for companies, especially tech startups, that are valued at $1 billion or more.

Mouchawar is quick to dismiss any such talk when I bring it up with him. “My team and I are not getting distracted by all this valuation talk. We do not want to feel comfortable,” he says. “We owe both our customers and merchants a lot more. We have just started. Souq is being built for tomorrow.”

Built For Tomorrow

But what does tomorrow look like? And how is Souq going to get there? At this moment in time, the MENA’s retail sector is not exactly in its finest moment but is still doing better than most other sectors. According to figures released by Euromonitor International, the overall retail sector—both online and physical—in the region is projected to grow from approximately $996 billion in 2015 to nearly $1.05 trillion in 2016.

And according to Kantar Retail’s market forecasts, Middle East’s retail market is expected to grow at 7.7% between 2015 and 2020, down from 9.8% seen between 2010 and 2015.

Ketaki Sharma, an economist, and founder and CEO of Algorithm Research , a UAE-based market research firm, says that e-retail is only a small proportion of total retail in the region vis-à-vis developed markets.

“Retail and consequently e-commerce in the MENA region will likely continue to see strong single-digit growth despite recent headwinds,” she says.

“We believe that this will be supported by steady population rise, tourism, and a high propensity to consume, which will likely outweigh headwinds from the anticipated introduction of a GCC-wide VAT [Value Added Tax] and relatively modest growth in personal incomes. This sector is expected to grow given good penetration of smartphones and credit cards in the GCC in particular.”

These, however, are forecasts, and while Mouchawar has one eye on them, he also understands the real slog that e-commerce is.  How Souq grows depends on how it is able to tackle its biggest challenges and how fast it does so.

Into The Dark

In the initial days of Souq, it was the mobile phone that propelled the business as the turn-of-the-decade smartphone mania gripped the world and the region. But even as mobile phone sales have somewhat leveled off, Mouchawar finds that the mobile phone is now both an obstacle and an enabler.

There are about 680 million mobile subscriptions across all of MENA as of 2014, a number that is expected to grow at an annual rate of about 6% in the coming years, reaching nearly one billion by 2020. And a major segment of those one billion mobile phone users will be between the ages of 18-35, who any e-tailer worth his salt must target and convert as loyal users.

“We are looking at mobile commerce in a big way. Online shopping in the region has been around for a decade…people have started buying products off their phones only in the last two years,” he says, explaining the newness of this space.

What the people working at his firm have found over the last two years is that more and more people, many of them falling under the ‘young’ segment, now browse and shop for their products on their phones. It’s a smaller but faster-growing number of online buyers.

That throws up the challenge of how to best display, recommend, and sell one product out of almost two million products on screens that are five inches small, run on data speeds that vary from 2G to LTE, to a person who could be sitting either in Cairo or Salalah.

“It’s a challenge. There are so many things that a mobile brings….it increases your geography…enables geolocations…recommendations…but we have to innovate to make the mobile shopping experience as comfortable as desktop shopping.”

Shipping is another challenge that Souq faces. As of now, the retailer operates directly in Egypt, Saudi Arabia, and the UAE and under cross-border trade rules in Bahrain, Qatar, Oman and Kuwait. That it can sell directly in two of the GCC states and not the others is only the tip of the problem.

It’s long been a lament of both retailers and shippers that the GCC is not a perfect economic union with each nation having its own custom and border rules, increasing costs and discouraging both sellers and buyers.

On top of that, many parts of the Middle East don’t have functioning address systems. Postal codes are not the norm either. Shipping into the interiors of Saudi Arabia and Egypt, the Arab world’s two biggest markets, is like shooting into the dark, most of the time. Road signs are sparse and there is not much to go on save a village name.

“The Arab world is 200 million people strong, but they sit in 22 countries. It’s great that we have one culture and one language, and so it’s quite easy to communicate with the customer. But the actual act of shipping someone his purchase is not so easy, to understate it of course,” Mouchawar says.

Here, the mobile phone comes into play as an enabler. “What differentiates [our logistics arm] is our use of technology in the way the network was made. Mobile phones…geo-locations…communications…they make last-mile fulfillment easier. We want to further integrate mobile phone technology to a point where the cost of shipping comes down…and it’s cost effective for a shopper to buy from us,” he says.

Another major part of the puzzle for Souq is the merchant. As of now, the ratio of its own inventory to that of sellers on its marketplace is 40:60. For Mouchawar however, the merchant takes pole position in the race ahead.

“We want to empower our merchants. Many of them have scaled with us. Some of them are quite big now and the tools they need and the way they want to manage their own business has definitely changed. We have to foster their growth to grow ourselves,” he says. “They are entrepreneurs just like us.”

More merchants would mean a Souq that would be moving faster towards being like Amazon, the biggest online retailer in the world, which incidentally, has taken a step into the region with a shop-and-ship agreement with Aramex.

“We are proactive in our engagement with our merchants. We are entrepreneurs…we understand their mindset. We want more merchants…want to help them start up,” he states.

What Souq wants to be

Of all these merchants, who he intends to sign up, there are some in certain categories that he wants to bring into the fold faster to evolve the brand to a point where people move from shopping the things they want occasionally from Souq to the things they want daily.

It was in 2005, along with Maktoob founders, Samih Toukan and Hussam Khoury, that Mouchawar started Souq as an auctions site. But in 2009, the American internet giant Yahoo! (yes, it was an internet giant then) came calling for Maktoob and bought it for a reported $169 million.

The sale was great news for the Arab tech ecosystem. Not so much for Mouchawar, or so you would say back then, because Yahoo! was only interested in the site’s email and media business, and not so much in his auctions platform. This led to Mouchawar re-tooling his business model, if I am permitted to oversimplify that two-year-long process in one sentence.

Seeing that a tech major, with all its due diligence, had not found value in the auctions model, Mouchawar pivoted the business towards an online retail model by 2011.

In the initial days, Souq was known for its electronics inventory. Since then it has expanded to other categories, including fashion, mothercare, sports, household appliances, and recently, into furniture. To reach this point, it has gone both the organic and inorganic way—the latter most notably demonstrated in its 2012 acquisition of, a flash site focusing on fashion. Like Souq, it too was a portfolio company of Toukan and Khoury’s Jabbar Internet Group.

But in the next stage of growth, Mouchawar wants it to be the retailer of choice for all things—daily or occasional.

Yes, he wants to sell them the washing machine, but also the washing powder that goes with it, and the clothes they will wash, Mouchawar explains.

That will be quite an achievement if the retailer is to accomplish it. For one, it is still lagging in some categories. Fashion for example. Niche retailers like German internet group Rocket Internet’s is quite a visible and well-funded rival in that category.

In mothercare and baby products, a site like has its share of the pie—it recently raised a multi-million dollar Series B round.

And then there are new entrants like, another retailer backed by Rocket Internet, which recently raised $67 million in a Series A round for an undisclosed valuation—the biggest ever Series A for the region.

“It is not going to be Souq all the way in e-commerce. Outside of electronics, I think it’s open season [for all]. How are you marketed…how well are you funded…how much can you discount…all these factors will tell if these retailers can shake or topple Souq’s cart,” says an industry source, closely associated with one of the aforementioned e-commerce firms, who does not want to be identified.

And what it needs

Mouchawar is unperturbed by all the challenge talk. He is confident that he has all of the ingredients to be in the game for longer, and to eventually up it enough to become uncatchable.

“It’s people. They are the most important ingredient in any business and most definitely in ours,” he says.

While not shy to bring in global expertise, Aleppo-born Mouchawar is clear that he believes in local talent. “We want to empower people in the region. We are able to bring talent from everywhere but training local talent will eventually result in a larger pool of people for the entire ecosystem. We have to reverse the brain drain, or building sustainable businesses would be difficult.”

With the recent infusion, funds being the other ingredient, Mouchawar says that he will be able to recruit, retain and reward the best talent in the region to boost the retailer forward, faster and stronger.

As for funds, you would assume, as a layman, that he has raised enough. Between 2012 and 2014, he went to investors three times, raising $150 million, before the recent mega-round. Growth in these years was almost always in the high double digits backed by a growing middle class, an influx of expats, and increased broadband penetration.

However, he is not done raising money. Recent media reports have quoted him as saying that Souq will go to the capital markets anywhere between 18 to 24 months from now to raise more funds.

The firm has been cagey about further details but the wider market is already buzzing with expectation.

There could be two logical reasons for going public—raising more money, or previous fund raising exercises coming to their logical conclusion for investors.

According to Algorithm’s Sharma, it could be either of the two. “Clearly, they are signaling continued momentum in growth to generate market interest.” 

On the market appetite for a Souq IPO, Sharma says that for some time now, tighter liquidity and bad newsflow have hurt market sentiment, making investors cautious.

“Having said that, the reform measures undertaken by governments are supportive of growth in the medium to long term. These, along with a recovery in oil prices, will considerably improve investor risk appetite in the medium to long term.”

While Mouchawar is not saying anything more on the IPO, he does give his own reasoning on raising more money.

“Short term, we are good with funding. But if you are looking at new areas as an entrepreneur, funding is always on your mind. That is the nature of business. You always keep an eye on future needs. Companies get bigger…their needs get bigger. We are fine now, but we may need more in the future,” he says.

And just as I think there is no more to that question, Mouchawar pipes up. “As an Arab, I want to reach our most disadvantaged customer, like the villager in Egypt and reach him in a way most convenient to him. This will need both funds and people…for us to be able to innovate and sell to that person in that village. That is the goal.”