High Noon for online shopping in Saudi Arabia

▶ New launches in December by Noon and Souq a fitting end to e-commerce’s big year

Earlier this year, many of us asked whether 2017 would be the real watershed year for e-commerce in the UAE and in the wider Arabian Gulf region.

While it’s taken a little time, moves by two of the region’s heavyweights suggest that 2017 will indeed go down in history as perhaps the key year for online shopping in the region.

Noon, the $1 billion e-commerce startup backed by Emaar Properties chairman Mohamed Alabbar and Saudi Arabia’s Public Investment Fund, has finally launched in Saudi Arabia, after making its debut in the UAE in September.

Both launches came far later than originally anticipated. Mr Alabbar originally envisaged a launch in both countries in January 2017.

But both services are now finally up and running.

Noon’s Saudi launch couldn’t have come a moment too soon for the company.

It took place the day after its rival souq.com’s partnership with Amazon was kicked into a higher gear, throwing down the gauntlet for the competition.

The services are likely to have a significant impact on online spending in Saudi Arabia and the UAE in the new year

Amazon, which acquired souq for US$580 million earlier this year, on Monday finally opened the floodgates to UAE customers with the launch of Amazon Global Store, allowing UAE customers to tap the retailer’s US site for over a million products.

The launch of Amazon Global Store in the UAE and Noon in Saudi are unlikely to make much of a dent in e-commerce spending for 2017, coming so late in the day.

Customers, many of whom will have already bought their big ticket items for the holiday season, will probably take some time to get used to the services, with some early bugs inevitable.

But the services are likely to have a significant impact on online spending in Saudi Arabia and the UAE in the new year.

BMI Research earlier this year forecast that the region’s online retail market, while still small compared with the rest of the world, will double in size to $48.8bn by 2021.

That forecast may be remembered as far too conservative if the services take off and inspire more competing offerings.