With solid backing from heavyweights, it’s high ‘Noon’ in Saudi
Following a successful September 2017 launch in the UAE to rival Souq.com, regional e-commerce platform Noon will launch in Saudi Arabia on Tuesday, Faraz Khalid, the CEO of Noon told Zawya during an event.
Recent Souq.com successes in the UAE, the emergence of WADI, and other e-commerce sites, may have encouraged the move just prior to the New Year, and just in time for some New Year gift buying online.
Souq.com, after posting record results in White Friday, said recently that one million products through the Amazon Global Store, the company that bought souq.com in July 2017, are now available for Dubai customers.
Noon might not be impressed as it has strong financial support itself.
Heavyweights in Noon’s corner
It is partly owned by Emaar Properties founder Mohamed Alabbar together with Saudi Public Investment Fund, the same sovereign wealth fund that owns Aramco’s shares, and the one investing billions in 1200% renewable Saudi NEOM, a city by the Red Sea.
“We have agreements with M.H. Alshaya Co and eXtra. Those partnerships are key relationships within our regional scope,” Khalid told Zawya.
Kuwait’s retail operator M.H. Alshaya Co.bought shares in Noon last September, but it was not revealed the size of the investment involved.
Noon also strengthened its online technology products and services signing a exclusive partnership deal with Saudi electronics firm eXtra, whose business is operation of consumer electronics, computer electronics, home appliances, cameras, watches and telecommunication equipment retail outlets.
During Bloomberg’s recent Invest Abu Dhabi conference Khalid was quoted during a panel discussion as saying that “One of the biggest roadblocks to good e-commerce in this region is lack of reliable infrastructure. If you are in the West, you could give your package to DHL or UPS and that is where your job ends.”
“In this part of the world, you need to transport the package, build a customer hub, and deliver the package … and that is almost even more complex than building the e-commerce venture itself,” he said.
Cash is king in this region which makes credit card use, a key success factor for e-commerce, a major obstacle to overcome before noon could secure e-commerce growth and this would require fast tracking digital payments.
Noon is investing in delivery infrastructure and technology to bring a modern shopping experience to customers in Saudi Arabia.
Noon launches with a broad range of exciting products and offers designed to meet the lifestyle aspirations of people in the Kingdom.
Noon’s catalogue offers a diverse set of categories like electronics, modern gadgets, fitness, sports, fashion, beauty, baby, home & kitchen and groceries.
Mohamed Alabbar, Founder of Noon, said, “Saudi Arabia is entering a new era of economic and digital transformation led by the Saudi Vision 2030. Noon brings a dynamic, locally-driven and customer-oriented digital marketplace to the Kingdom serving the community and offering a new retail and much improved experience. With talented young Saudis driving its operations, along with being powered by Saudi and regional retailers showcasing their amazing products, the platform also offers Saudi entrepreneurs, including start-ups, to be part of a fast-growing digital ecosystem.”
The UAE retail market is forecast to grow from $56.4bn in 2016 to $59.6bn in 2017, according to Euromonitor International, where online sales in the UAE to rach $10bn by 2018, according to consultancy A.T. Kearney.
Josh Holmes, a consumer analyst at market researcher BMI, told Reuters in October this year that online sales in Saudi Arabia are expected to surge to $13.9bn by 2021 from a projected $8.7bn this year.