Until fairly recently the Middle East was a rather underdeveloped region from an eCommerce point of view. According to McKinsey, 50 million consumers are scattered across several countries in the region and yet only two percent of all retail spend flows online today.
But, as Aristotle is reported to have noted (though probably not in Latin) “horro vacui,” nature abhors a vacuum, and the race to fill in the untapped space in the Middle East has been eagerly underway in 2017.
And, technically speaking, for a chunk of the dying days of 2016, when Emaar Properties PJSC Chairman Mohamed Alabbar and Saudi Arabia’s sovereign wealth fund announced intentions to launch a billion-dollar venture to more fully develop the Middle Easter eCommerce market. Alabbar is best known as the developer of the world’s tallest skyscraper in Dubai, and as a longtime enthusiast for enhancing the digital commerce marketplace for Middle East consumers, having mentioned at various times interest in founding a WhatsApp -like app for the region.
The venture was launched with an ambitious goal. Profitability in five years and a product offering of 20 million products on its site.
But though the site was initially billed as launching in January of 2017, that seems to have only been for beta testing. Full launch was initially billed as coming in June or July of 2017, but so far it hasn’t happened, and there is no official word on when it will. CEO Faraz Khalid has said the launch is on track for 2017 in the UAE, but he has offered no additional details.
“We are on track to launch Noon this year, with the final work on the fulfillment infrastructure and payment systems being completed,” Alabbar said. “Several of the region’s leading brand owners and suppliers have come on board, underlining our local strength.”
Inside sources, speaking on condition of anonymity to media, said beta testing has taken longer than expected as Noon is attempting to ensure it launches a perfected offering to the affluent, and generally digitally savvy audiences in the UAE.
“Nothing is being left to chance here. When this goes live, you will be able to order millions of different items and have your goods in just three hours. We are also working around the clock to make sure that every single item sold on Noon is original,” the source said. “We are focused on providing the fastest delivery times, a seamless technology-enabled experience and top-notch customer service. We are absolutely confident that Noon will deliver on these promises. Noon will truly be a game-changing initiative that will make an impact on the global stage.”
It better, because it will already be competing with another player whose game-changing technology (not to mention insights into eCommerce logistics) have already made an impact on the global stage. This month, Amazon completed its $580-million acquisition of rival firm Souq, based in Dubai. With that acquisition comes a chance for Amazon to apply its well-tested and proven effective methods with a natural entry point into a difficult market. Souq.com, according to its internal data, claims over 45 million visitors per month and a range of 8.4 million products across 31 categories.
Amazon, according to reports, had initially only sought to become an investor in Souq. However, pressure from the forthcoming Noon, and a host of other eCommerce startups in the Middle East’s suddenly quite active digital economy convinced them that acquisition was the path to a firmer local foothold.
“It is an exhilarating time for the eCommerce industry in the region. Together with Amazon, our goal is to offer our customers the widest product selection, great prices, improved delivery times and first-rate customer service,” Souq.com CEO and co-founder Ronaldo Mouchawar said in a statement at the time of the acquisition.
But, Noon’s CEO is equally enthusiastic about his firm’s chances as he attempts to steer the ambitions billion-dollar eCommerce project through a tricky and complicated launch. Khalid bring experience to the table. Before taking on the top job at Noon, he was the general manager of online fashion retailer Namshi.com (Noon has said fashion will be one of its premier areas of interest).
“Noon presents the opportunity to create a dynamic eCommerce platform for, by and in the region,” Khalid said. “With our local market knowledge and presence, and our focus on product authenticity, supplier value creation, superior logistics, professional service and competitive pricing, we aim to bring a transformational eCommerce experience to the Middle East.”
Now all they have to do is find a way to launch it.