BMI Research forecasts Mideast online retail sales to more than double by 2021
Noon launches in the UAE, tapping into regional e-commerce boom
Noon, the US$1 billion e-commerce platform founded by Emaar Properties chairman Mohamed Alabbar, started operations in the UAE on Saturday to tap into the region's fast-growing e-commerce industry that is forecast to double in size by 2021.
The platform is set to go live in Saudi Arabia “in the coming weeks”, the company said in a statement on Saturday.
“Today, we are excited to deliver orders to our first customers," Mr Alabbar said. "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.”
“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.”
Noon is a joint venture project between Saudi Arabia's Public Investment Fund and a number of prominent Gulf investors led by Mr Alabbar, chairman of Emaar Properties.
The creation of Noon comes amid a flourishing of e-commerce businesses in the region, especially after Amazon purchased the Dubai-based online retailer Souq.com for US$580 million.
The Middle East's e-commerce sector is growing faster than anywhere else in the world, with online sales expected to double to $48.8 billion by 2021, according to BMI Research.
"While partly due to low base effects, we believe the affluent consumers, developed transport networks for logistics and high internet penetration levels, the Middle East is home to a number of attractive e-commerce markets, led by the United Arab Emirates," BMI said last week.
The e-commerce sector has been rapidly growing in the UAE thanks to the country's affluent and digitally savvy population as well as the adoption of technology. Mergers and acquisitions in the sector have picked up pace over the past year.
There is also a notable push by a number of home-grown brands to go beyond brick and mortar operations that have traditionally defined the retail landscape, with a pivot to develop the online shopping industry and directly challenge the likes of Souq and Noon.
Noon customers can browse the platform's catalogue of brands by visiting www.noon.com or by downloading the Noon Mobile App via Google Play Store. A mobile app via App Store will be available in the coming days.
The platform's launch has been long awaited, as it had originally planned to go live in January 2017.
In July, it appointed Faraz Khalid, the co-founder of online fashion retailer Namshi.com, as its new chief executive, to help steer the company through its launch.
Last month, MH Alshaya, the Kuwaiti franchise operator which is present across the Arab world, Turkey and Russia, bought a stake in Noon, although the size of its investment was not disclosed.
MH Alshaya will list its portfolio of international brands covering fashion, health & beauty and home & lifestyle categories on Noon’s platform.