DUBAI: Days after Amazon announced the launch of its first Middle East centers, online retailer Noon.com has gone live in the UAE, boosting a rapidly nascent e-commerce sector in the Gulf.
The site started working at the weekend and the app is scheduled to launch in days, its backer Dubai-based real estate giant Emaar Properties said in a statement.
Analysts said the arrival of Noon.com is expected to trigger a price war in the developing regional e-commerce market and will likely alter how shopping is done in the consumerist culture of the Gulf.
“It is important for us to shape a digital marketplace that is relevant to our local markets and serves as a growth platform for brick-and-mortar retailers,” said the project’s founder, Emaar chief Mohammed Alabbar.
Investors of the $1 billion project include Saudi Arabia’s Public Investment Fund and leading Kuwaiti retail business group M.H. Al-Shaya Co.
Described by Emaar as an “Arabic-first e-commerce platform,” Noon.com will offer a range of clothing, home goods, and grocery staples.
It is also expected to start delivering to Saudi Arabia within the next few weeks.
The news comes just six months after Emaar offered $800 million to acquire rival retailer Souq.com but lost to international giant Amazon, which acquired the region’s biggest online retailer for $650 million.
On Sept. 25, Amazon Web Services announced a deal with the government of Bahrain to open its first Middle East data centers in the Gulf, expected to be ready by 2019.
Combined with the interest of Amazon and its subsidiaries in regional e-commerce, Noon.com and Souq.com are expected to intensify competition in what consultancy McKinsey has called an untapped e-commerce market.
E-commerce competition “will help change the culture of shopping in the region in the long-term,” said the CEO of Dubai-based Old Town Advisers consultancy.
“I don’t think the (e-commerce) market is saturated to such a point” that there is no place for newcomers, Faraz Mehmood told AFP. “There is still room for more.”
Smaller players in the online shopping market may, however, find it difficult to compete, Mehmood said.
Noon to trigger web shopping price war in Gulf
Noon to trigger web shopping price war in Gulf
Experts clash over effect of war on oil supply
- International energy chief dismisses crisis fears * But Qatari minister warns exports could halt ‘in weeks’
BRUSSELS: International Energy Agency chief Fatih Birol on Friday dismissed fears of a global oil crisis, and said there was “plenty of oil in the market.”
But he was contradicted by Qatar’s Energy Minister Saad Al-Kaabi, who said Gulf oil producers could halt exports within weeks because of the US-Israel-Iran war, sending crude prices to $150 a barrel.
The war on Iran and Tehran’s retaliatory attacks across the Gulf have already sent crude prices soaring by about 20 percent, fanning fears of a fresh spike in inflation that could hit the global economy. Shipping through the critical Strait of Hormuz has all but dried up.
US President Donald Trump has pledged to protect ships passing through and promised further action to “reduce pressure on oil,” but prices have remained elevated. Brent crude, the global benchmark, was up 2.77 percent on Friday to nearly $88 a barrel.
However, Birol said: “There is plenty of oil, we have no oil shortage. There is a huge surplus in the market. We are facing a temporary disruption, a logistical disruption.”
Nevertheless, Al-Kaabi insisted there would be pressure on oil supplies “in two to three weeks” if tankers were unable to pass through the Strait.
“Everybody that has not called for force majeure we expect will do so in the next few days that this continues. All exporters in the Gulf region will have to call force majeure,” he said. “Everybody's energy price is going to go higher. There will be shortages of some products and there will be a chain reaction of factories that cannot supply.”
Qatar halted its liquefied natural gas production on March 2, as Iranian retaliation for US and Israeli strikes continued to target Gulf countries.
