King of e-commerce in the Middle East

After spending 11 years launching and working for several startups in Silicon Valley, it was clear to Ahmed Khatib that his passion was building companies and watching them grow.

As the economic environment in the United States started to deteriorate, he wanted to do something more entrepreneurial outside the U.S.

He began to look at possibilities specifically in the Middle East since his family was there, too.

He thought to leverage the experience and knowledge he had gained to quickly attract funding for his startup.

Having seen the private shopping business model succeed in several emerging markets, including Turkey (with Trendyol) and Russia, he thought this model could work as well in the Middle East.

“The Middle East has a very young population that loves brands and is fanatical about expressing themselves through lifestyle products and fashion. All the basic ingredients for MarkaVIP to succeed were clearly present in the market even though the barriers to entry are quite challenging,” said Khatib.

The population of Internet users in the Middle East (not including Iran) is as large as it is in Turkey. However, it continues to grow as more and more people get online.

At a very early stage, Khatib’s start-up business, MarkaVIP, was backed by smart investors from the Middle East, Turkey and Europe. Coupled with his industry expertise and top level team, they were able set up an innovative model that slowly broke down the difficult barriers guarding entry into the Middle East market. They set up local distribution centers in their major markets and offered cash on delivery service to people who didn’t have a credit card or did not trust online-shopping sites. They also set up sourcing offices in Istanbul and San Francisco to attract up-and-coming brands. The basic success of MarkaVIP lies in the quality products they offer at unmatched value and convenience to their customers.

The customers need to become members to shop from the site. Khatib explains why: “In order to protect our relationships with the brands and their distributors and to offer an exclusive setting to our customers, we [chose] to make the platform closed to members only.”

MarkaVIP is doing seven figures on a monthly basis at a growth rate of 30-50 percent; 10 million page views per month with over 100,000 visitors on a daily basis. They also have 700,000 registered users and are registering 3,000 to 5,000 a day, with 200,000 fans on Facebook. This shows that Middle Eastern customers are very fashion aware and savvy, willing to experiment with new brands and love to set trends.

They sell men’s and women’s apparel, accessories, shoes and all kinds of garments on the site. This includes bags, sunglasses, belts, watches, hats and lingerie. They also sell home, kitchen and bathroom accessories as well as electronics. They plan to feature cars and real estate very soon.

More than 50 percent of their offers and revenue come from Turkish-made products and suppliers inside Turkey. “People in the Middle East love to buy and support Turkish brands, and they are increasingly buying them as an alternative to other brands,” said Khatib.

Apparel, including intimate apparel and accessories, sell the best, he said.

The average transaction is around 130 dollars per order, which is one of the highest in the world.