Souq.com boss Ronaldo Mouchawar on start-ups, innovation and drones

With over 400,000 products on offer and 10 million monthly visitors, there's no surprise why Dubai-based internet start-up Souq.com is dubbed the Amazon of the Arab World.

Established in 2005, the online marketplace was one of the first to break into the Middle East e-commerce space and behind the scenes is co-founder and CEO Ronaldo Mouchawar, who says they still have a long way to go.

Backed by a fresh round of funding worth $75 million from South African investors Naspers, he aims to get the site into "every household". We spoke with Mouchawar about how he set up the business and where he sees it going.

THE SOUQ.COM STORY

The internet was a very different place when Souq.com laid down its roots almost 10 years ago.

"We launched in 2006, when businesses were reluctant to come online and sell their products, so we catered to build a platform for the consumer initially," Mouchawar explains.

Since 2009, Souq.com has transformed into a B2C platform allowing businesses and brands to tap into an ever-growing online audience. From electronics to gift items, users can find almost anything on Souq.com and if Mouchawar has his way, they soon will get everything they could ever need online.

"At any given time, 400,000 products are listed on the site. We started as a more electronics-focused site but we've added fashion, beauty, baby [products] - anything that you can think of in the mall should be available on Souq.com."

LOCAL MATTERS

Souq.com focuses on three core markets: UAE, Saudi Arabia and Egypt, with warehouses in every major city in the Gulf region. Mouchawar says Souq.com's main asset is this local outlook - and that's what sets them apart from the likes of Amazon and eBay.

"While the basic premise is e-commerce, we solve a lot of local issues and problems and innovate on how payments should be done - how do you deliver to a country with no postal system or no addresses?" he asks.

"As we scale, we need to make sure our operations meet the demand [by] making sure we have delivery teams in more cities in the Arab world - this will be ongoing."

His 1,000-member team has to come up with innovative ways to deliver goods in cities and neighbourhoods where traditional systems are not in place.

"We're very local - we empower people in their homes, be it in Alexandria or Jeddah or anywhere in the Arab world. We solve local problems and that's why Souq has been successful and continues to be."

And this is where the new round of funding will be used, to continue establishing their infrastructure and fuelling more innovation.

"We are a local platform so we are well-positioned in the market from a geographic point of view. The round that we raised will fuel that growth in terms of making sure we have the operations and logistics to make sure our customers are happy."

Talent is key to its future and this is where Souq.com will invest in.

"We need more personalisation and need to build a better and stronger infrastructure for the company so a lot of [the funding] will go into talent and technology."

"The challenge for us is how we grow. We have a great start-up culture and as the company grows we'd like to keep thinking of ourselves as start-ups. Keeping that culture of innovation, growth and fun as well as the start-up mentality of ownership is one of the challenges."

'A MOBILE REVOLUTION'

Earlier this year, Souq.com released a suite of apps for mobile devices, which to some might seem a bit late in the game.

Mouchawar admits it was a deliberate move. "We focused on making our website work well on mobile phones, and we wanted to ensure our apps are better than the website."

And they're already seeing a shift in user behaviour, with 40% of purchases now coming from mobile. Conversion rates in the app are even better than the website, he added - unsurprising in a market with one of the highest mobile audiences in the world.

Mouchawar says his team is watching users closely and admits this is the year they will see a significant shift in consumer habits.

ARE DRONES THE FUTURE?

And what the consumer wants is what Souq.com aims to provide - be it mobile, or even drone delivery.

Amazon revealed in late 2013 that it was testing package delivery using drones in a much-talked announcement that had many wondering if this was the future. In February this year, the UAE government said it would bring drone delivery for government services such as document delivery within a year.

"We're a technology company and we owe it to our users to see if that reduces the cost, accuracy or speed of delivery. That said, I'd like to see how [drone delivery] could work in a city like Cairo where people live in crowded places."

These are all part of "exciting times," says Mouchawar, adding they are watching it closely.

HIS FOUR TIPS FOR SUCCESS

Setting up a long-lasting business is a dream for many, one that needs hard work and pure dedication. Mouchawar shares his recipe for success.

• Tip #1: Understand how you can be better that what is out there. The real secret is how you execute an idea.

• Tip #2: Believe in your mission and understand the business you are getting into.

• Tip #3: Make sure you have a co-founding team. You're always better with multiple people.

• Tip #4: Are you ready for it? It's going to be a long way and hard work.