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A Syrian Entrepreneur Looks To Build The Amazon Of The Arab World

Dec 4, 2014
Originally published on December 8, 2014 3:10 pm

When Ronaldo Mouchawar was working in a Boston engineering firm he dreamed of moving back to the Arab world. Born and raised in Aleppo, Syria, he had come to the U.S. to study, then got a high-paying job, but he believed he "owed something" to his home region.

It turned out his ticket back was a smart idea at the right time.

He founded Souq.com in 2006 and settled in Dubai, the financial capital of the United Arab Emirates. Now he's the CEO of what's considered the most successful e-commerce site in the region. He recently raised $150 million in capital to expand. The 44-year-old entrepreneur says commerce is part of his DNA.

"I studied engineering, my dad was a really strong trader merchant, so the combo was a no-brainer for me."

Setting up a business in many Arab countries is difficult, which made business-friendly Dubai an obvious base. Internet penetration had reached 20 percent in the UAE by the time he moved there. His e-business took off a few years later when the regional cell phone revolution connected millions more to the net.

"Suddenly, you go from 30 million users to 130 million users" in the Arab world, he says in his glass-walled office in Dubai. This meant potential customers in Egypt and Saudi Arabia. "The Arab world massively embraced mobile technology. There is 70 percent penetration in the Gulf. That was prime territory for us."

A Quiet Transformation

In a region where war, political turmoil and oil prices dominate the headlines, technology quietly is transforming the Middle East, says Mouchawar. He recognized the potential early and is riding the wave. Now, Internet start-up companies in Dubai attract millions of dollars from venture capitalists who come from Silicon Valley and from the Middle East.

"For those of us who sit in the middle of it, we already feel it," says Fadi Ghandour, the founder of Aramex, a logistics company based in Amman, Jordan. He moved his operation to Dubia and spends most days listening to start-up pitches. He's now a full-time investor in a movement he believes will reshape the region.

"You can feel the crescendo," he says. "People will start to feel that energy that you saw in Tahrir Square, in Egypt," he says, referring to an Arab democracy movement that started in 2011. "This is the energy of the start-up community across the region."

Technology is embraced by the young generation in a region where 60% of the population is under 35. "Youth empowerment, this was a driver for us," says Mouchawar.

Jobs for this generation are scare. Youth unemployment is in double digits in all Arab states. Tech jobs can change the statistics by leveling the playing field for educated tech specialists in a part of the world where family connections are often the key to a decent job.

Creating A 'White Friday'

On the day I visit the offices, the workspace for hundreds of young employees is decorated with black and white balloons. The open space floor plan, with the soft clatter of keyboards and clustered meetings, has the vibe of any tech company. But it is striking to see so many young women monitoring computer screens and heading planning meetings.

The balloons?

"It's a very tough day," says Mouchawar, as he gives me a tour, "so just to make sure we have some fun."

There is an all-nighter ahead for the entire team in the countdown to the biggest shopping day of the year. It's a first for Souq.com. Think Black Friday.

Mouchawar rebranded the shopping day. He calls it "White Friday," a more fitting name for Arab culture. "We wanted to own it, to own the brand."

He explains that it makes cultural sense. In the Arab world, Friday is the traditional day of prayer. A "black" Friday doesn't work in Arabic.

In the highly competitive world of e-commerce, Mouchawar has localized and Arabized a successful business model that has already proven successful in the West.

"One of the challenges is how we Arabize millions of products, product descriptions, build a proper catalogue index, but that's our edge," he says.

He walks into the "war room" where another team is watching large computer monitors in the lead up to the start of White Friday.

"We have screens to see traffic, sales, Twitter feeds, what customers are saying," he says.

Saudi Arabia is big on Twitter but in Egypt the favored communication tool is Facebook. The team follows all the social media feeds in real time for feedback on what customers are saying about quality and price.

For Mouchawar, e-commerce is a platform that can build a new Middle East. It could create badly needed jobs for young people and boost the businesses that are the backbone of Arab economies.

"If you see where the jobs are, it's got to come from small and medium businesses," he says. E-commerce can provide distribution for these merchants for the first time and open markets across the Middle East.

"Imagine the access this merchant can have from a street in Cairo to a customer base in Saudi Arabia, to the UAE. If we can connect all these dots, you will have an incredible customer base."

He explains that the company handles the "last mile" deliveries even to places with no dependable mail service or a postal address.

Mouchawar met his goal of driving 10 million users to the website with White Friday sales, partnering with product giants including Microsoft, Apple, Samsung and Sony, to offer deep discounts. It's another step in building a brand.

The start-up culture took off in 2011, just as Egyptian protesters went to the streets of Tahrir Square in Cairo. That energy for political change has been diverted and exhausted. The tech revolution continues as the more promising Arab Spring.

Copyright 2020 NPR. To see more, visit https://www.npr.org.

DAVID GREENE, HOST:

Let's talk about a way to spend money that you don't have to disclose unless it's to your spouse - shopping. Some describe the Persian Gulf city of Dubai as one giant high-end shopping mall. People flock there from all over the Arab world. And this is noteworthy - almost all of that shopping is done the old-fashioned way, in brick-and-mortar stores. Online shopping in the Middle East is still a largely untapped market but a potentially huge one in a region where over 60 percent of the population is under 40. From Dubai, NPR's Deborah Amos has the story of a company leading the e-commerce charge.

DEBORAH AMOS, BYLINE: The Middle East is the latest digital frontier. Step into the offices of souk.com, the most successful e-commerce site in the region, and you can see the revolution. The workforce is young. They're tech savvy. There are plenty of women monitoring computer screens and heading planning meetings. CEO Renaldo Mouchawar walks the open-space office. He chats with the staff. This is an important day, and an all-nighter is ahead. It's the countdown to the biggest shopping sale of the year.

RENALDO MOUCHAWAR: So this is kind of the command center. We have screens to see traffic, sales, Twitter feeds, what customers are saying.

AMOS: Will everybody be up all night?

MOUCHAWAR: Pretty much from 11 on.

AMOS: Think Black Friday but rebranded. Mouchawar calls it White Friday here. He says it's a better label for a sale on the traditional Muslim day of prayer. This is a model borrowed from the West, localized and Arabized.

MOUCHAWAR: One of the challenges we had is how we Arabize all these millions of products that are on the site - how we build the proper catalog index. It's available in English but not as easy in Arabic. So this is another one of the challenges, you know, but it also gives us an edge.

AMOS: Mouchawar is an Internet pioneer. He's educated in the U.S. He worked as an engineer in Boston but wanted to move back to the region. He launched his site in 2006. The business took off when the cell phone boom spread across the region and millions more customers came online. Commerce is in his DNA, he says. He comes from a merchant family in Syria.

MOUCHAWAR: I studied engineering. My dad was, like, a really strong trader merchant, so it's like the combo is kind of no-brainer for me. It's just really an incredibly complex but very exciting space.

AMOS: Here in Dubai, shopping is part of the culture. These giant shopping malls have indoor ski slopes, waterfalls. Eighty million customers come each year. E-commerce is still a fraction of those sales, but the Emirates have cut red tape for startups. International investors are moving in to pick the winners and help them grow.

FADI GHANDOUR: You can see the crescendo that is going to explode. For those of us that sit in the middle of it, we already feel it.

AMOS: That's Fadi Ghandour, the founder of Aramex, a Jordan-based logistics company. He moved his operation to Dubai, and he spends his time listening to startup pitches. He's now a full-time investor in a tech movement he believes will reshape the region.

GHANDOUR: People will start to feel that energy that you saw in Tahrir Square in Egypt. This is the energy of the startup community across the region.

AMOS: There's energy here at the call center for souk.com, a place where young tech experts find jobs, also where a merchant with a small shop on a Cairo Street can expand to sell to Saudi Arabia and Kuwait. souk.com handles the deliveries even to places with no reliable mail service. And now the company is attracting international talent. Sam Daoud left his job at eBay in the States.

SAM DAOUD: Because I met a great entrepreneur who was onto a great idea and decided that, you know, we can make history.

AMOS: He signed on as the chief tech officer, willing to take a risk.

DAOUD: The rest of the world was pretty much conquered, and this was territory that was no man's land, right? And these guys were way ahead of the game, right? So Souk was way ahead of everyone else, but there was still a long way to go. So we figured this is an opportunity to make this company, like, it.

AMOS: The website hit its goal of 10 million users from sales on White Friday - another step in building a brand. Deborah Amos, NPR News, Dubai. Transcript provided by NPR, Copyright NPR.