The year 2017 has been a watershed of sorts for the Gulf’s booming e-commerce industry, which has witnessed a barrage of acquisitions, launches and investments over the past few months. And the cherry on top is the launch of Noon.com today.
The $1 billion ecommerce platform, founded by Emaar Properties chairman Mohammed Alabbar, Noon is billed as the Middle East’s homegrown competitor against US giant Amazon, which made waves when it acquired Souq.com, one of the biggest ecommerce platforms in the region, in March this year.
Notably, Goldman Sachs described Souq.com’s takeover as “the biggest-ever technology M&A transaction in the Arab world”. But it looks like Noon is more than prepared to fight it out and come out on top.
Backed by a group of prominent Gulf investors, including Saudi Arabia’s Public Investment Fund (PIF) and Kuwait’s MH Alshaya & Co, noon.com is expected to give a tough fight to cash-rich Amazon.com, which is speculated to enter this market by December this year.
With the Gulf e-commerce market expected to be worth $20 billion by 2020, according to global consultancy firm AT Kearney, it does seem like there’s enough for everyone – but who will come out on top?
Noon.com is trying to cash-in on being a homegrown, Arabic brand: “We are proud to take this important first step in our journey and we are committed to making Noon the region’s Arabic-first e-commerce platform,” said Alabbar.
However, market pundits are of the view that, despite having the homegrown image advantage, it will not be a cakewalk for Noon.com to beat Amazon, whose Souq.com already gets approximately 23 million online visits in a month.
Clash of the titans
Both companies are underpinned by a strong understanding of the regional market as well as recent technological advances, especially the growth of digital.
“As digital technologies cause disruptions across industries and geographies, it is important for us to shape a digital marketplace that is relevant to our local markets and serves as a growth platform for brick-and-mortar retailers,” said Alabbar.
On the other hand, according to Russ Grandinetti, Amazon senior vice president for international consumers, Souq.com’s takeover will help the US-based firm to be an ecommerce pioneer in the Middle East, creating a great shopping experience for customers.
“We are looking forward to both learning from and supporting them with Amazon technology and global resources,” The Financial Times quoted Grandinetti as saying, following the takeover.
In fact, before Amazon acquired Souq, none other than Alabbar himself was after the brand. In March this year, news broke that Emaar Malls PJSC had reportedly put in a bid of $800 million for Souq.com, but the deal did not materialize eventually.
However, Amazon won Round One of that fight, finally picking up Souq.com for an as-yet-undisclosed amount in March 2017.
Undeterred, in May 2017, a fund led by Alabbar acquired UAE-based online marketplace JadoPado.
Ronaldo Mouchawar, CEO and co-founder of Souq.com, had expressed optimism about Amazon’s entry into the Middle East.
“We are very happy over this deal with Amazon and I am hopeful that it will open new avenues for the ecommerce industry in the region. Eventually, it will add more value to the overall ecommerce industry,” Mouchawar recently told TRENDS magazine, a sister publication of AMEinfo.
So, is the Middle East gearing up to witness Round Two?
And in this corner…
Noon, the digital marketplace created from the region, for the region and powered by the region’s leading retailers, is now live at www.noon.com.
An idea brought to life by Alabbar through a joint venture with a group of prominent Gulf investors, backed by an initial capital outlay of $1 billion, Noon has hit the ground running, having recruited young Arab and global talent with e-commerce experience.
Noon is also actively opening up the digital marketplace to emerging entrepreneurs, adding to its already established active supplier base in the Kingdom.
As a customer-focused, Arabic-first e-commerce platform, Noon has been built to cater to the expectations of the region’s customers and retailers. The platform aims to use its local roots to deliver a service that is warm, attentive and personalised.
“Noon will lead the way in regional e-commerce. We aim to deliver a market-leading customer experience by leveraging great supplier relationships, reliable technology, robust payment systems and highly scalable fulfillment infrastructure,” stated Alabbar.
“We are establishing strategic partnerships with an extensive range of regional retailers, distributors and global brands. These partnerships will allow Noon to provide its customers with a broad catalogue of product across categories. With Noon, we aim to deliver an e-commerce platform that creates long-term economic value, is truly relevant to the region and supports its home-grown enterprises,” he pointed out.
There’s no doubt that Noon derives strength from its strong connections with the local retail community. Its marketplace platform will empower large and small businesses to participate in the region’s growing e-commerce market.
Noon has also partnered with market leaders, small and medium enterprises, and startups, with the goal of helping them capture a greater share of the e-commerce market in the region.
While Souq.com is currently going strong, only time can tell if the shopping cart will be upset by Noon, a homegrown brand with mega bucks behind it and a goal of being a winner from the region, for the region and beyond.
After officially coming online for UAE customers, noon.com is expected to go live in Saudi Arabia in the coming weeks.