MidEast 'can sustain' third e-commerce giant after Noon, Amazon

Report says the UAE will account for 50% of regional e-commerce sales by 2020
MidEast 'can sustain' third e-commerce giant after Noon, Amazon
By Sarah Townsend
Thu 01 Jun 2017 02:29 PM

The Middle East e-commerce market could sustain a third major player after Mohamed Alabbar’s Noon.com and Amazon’s acquisition of Souq.com, a report claims.

The region is one of the fastest growing e-commerce markets in the world but it is starting from a relatively low base, notes the report from BMI Research.

The report forecasts the Middle-East’s e-commerce sales volume to rise from a 2016 estimate of $22.3 billion to $43.3 billion by 2020, of which $19.8 billion will come from the UAE.

Economic diversification, improved workplace participation rates and expansion of mobile and wireline broadband will support the market’s growth over the next decade, while strong competition wrought by Noon.com ann Souq.com/Amazon “only poses upside risks to our outlook”, the report says.

However, it adds consolidation of local players is crucial for the growth of Emaar chairman Alabbar’s Noon.com.

By 2018, the Middle East e-commerce market will have changed drastically and snapping up small local e-commerce outfits “represents Noon.com’s best chance of establishing itself before Amazon can steamroller its way into the region”.

The report says: “Despite some headwinds, Noon.com is very likely to become a strong competitor catering to the whole region.”

Emaar Malls last month agreed to buy 51 percent of Namshi, a Middle-East e-commerce fashion website, for $151 million.

BMI notes that, after failing to outbid Amazon for Souq.com, the Namshi acquisition will provide crucial support for the launch of Noon.com.

Nevertheless, the challenge remains “for Emaar Properties to leverage synergies in its patchwork of acquisitions into an integrated platform that can provide credible competition”, the report argues.

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