The e-commerce market in the Middle East has undergone tremendous changes in the past few years, with the rise of two major platforms, Noon and Souq, being the most eye-catching. These two platforms represent the new trend and huge potential of e-commerce in the Middle East respectively. This article will take a deep look at the development history, key moments and their position in the e-commerce field in the Middle East.
I. The birth and evolution of Souq.
Souq was originally a shopping website under Maktoob, the earliest portal in Arabia. In 2006, it started its e-commerce journey as an auction website, and in 2007, Souq took a new step and launched the store service, providing users with the convenience of purchasing fixed-price goods. However, its development has not been smooth sailing.
Yahoo acquired Maktoob for $164 million, but unfortunately, the acquisition did not include Maktoob’s e-commerce website Souq and payment tool CashU. This move triggered another entrepreneurial journey for Maktoob founder Samih, who founded Jabbar Internet Group and held a majority stake in Souq and CashU.
Although Souq’s name was replaced, it has incorporated the power of Amazon. With the support of Amazon, Souq and its founder Ronaldo Mouchawar are expected to usher in more rapid development.
Second, Noon’s new pattern.
Compared with Souq’s tortuous development process, Noon entered the Middle East e-commerce stage with a more ambitious attitude. It was launched in the UAE at the end of September 2017 and officially debuted in Saudi Arabia in December. It is headquartered in Riyadh, the capital of Saudi Arabia. The main investors behind it are Emaar Real Estate, one of the largest real estate developers in the Middle East, and the Saudi sovereign fund, which jointly invested US$1 billion to build this platform.
Emaar Real Estate owns the world’s tallest building, the Dubai Tower, and the world’s largest shopping mall, the Dubai Mall, in the Middle East. Its founder, Mohamed Alabbar, is the chief advisor to the King of Dubai and Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates.
Noon.com has been hailed as the “first e-commerce platform in the Arab region” since its inception, covering products in many fields such as beauty, fashion, electronics, home, kitchen and daily necessities. So far, Noon has opened three national sites in the UAE, Saudi Arabia and Egypt, implemented localized operations, supported two languages, English and Arabic, and provided users with a full-category shopping experience.
Noon’s ambition is reflected in its future plans. The platform plans to cover the entire Middle East and North Africa market in the next few years and increase the e-commerce penetration rate in the Middle East from the current 2% (US$3 billion) to 14% (US$70 billion).
3. Future development trends of e-commerce in the Middle East.
With the rise of e-commerce platforms such as Noon and Souq, the e-commerce industry in the Middle East has entered a new era of development. The competition and cooperation between these two platforms have jointly promoted the vigorous development of the Middle East e-commerce market.
Among them, Amazon’s acquisition of Souq is an important node in the history of Middle Eastern e-commerce, bringing more convenient and diverse shopping options to Middle Eastern consumers. The launch of Amazon.ae provides consumers in the Middle East with a richer shopping experience, integrating Amazon’s successful experience in the world into the Middle East market.
Noon, based on localized operations and rich investment background, is committed to becoming the preferred platform for e-commerce in the Middle East. Its product lines spanning multiple fields and its deep understanding of the Middle East market make it stand out in the fierce competition.
In general, the rise of the e-commerce market in the Middle East is inseparable from the efforts and innovations of these leaders. In the future, with the advancement of technology and the continuous changes in consumer demand, the Middle East e-commerce market is expected to usher in a more prosperous development. As leaders, Noon and Souq will continue to lead the Middle East e-commerce industry forward and bring more choices and convenience to consumers.