Earlier this year, news that Amazon had acquired Souq.com threw the Middle East retail scene into turmoil, for the e-commerce giant’s hunger for growth is legendary. Yet over the ensuing months, business has more or less returned to normal. As we consider how Amazon changed the face of India’s e-commerce landscape forever – despite a late entry onto the local scene – and given the many similarities seen between India and Middle East market conditions, we could well be witnessing the calm before the storm.
Noon.com, the $1 billion e-commerce joint venture founded by Mohamed Alabbar, was announced in November 2016 as a ‘future-focused company which is the biggest online shopping platform ever seen in the region’. Its launch at the time was expected in January 2017.
Since then, noon acquired JadoPado in May and appointed Faraz Khalid (formerly of Namshi) as CEO in July following Emaar’s acquisition of 51% of Namshi.com. Meanwhile, Amazon completed their acquisition of Souq.com in July.
On the evening of the 30th September the long awaited noon.com went live followed by a dozen announcements in the regional press. By the end of the next day, The National even published a price comparison benchmark with their direct rival Souq.com.
We visited the website of this new marketplace with a lot of excitement and asked ourselves ‘Is noon.com up to market expectations?’
On September 19th, the Chinese e-commerce giant Alibaba went public after months of hype. The IPO frenzy hit the New York Stock Exchange with a share price increasing by 38% on the first day of trading, making Alibaba the largest IPO ever with a historical $25b.
Why the hysteria? Simply put, Alibaba is the biggest, most successful e-commerce company ever, with bigger transaction volumes than both eBay and Amazon combined.
The Chinese success story, which covers different online formulas, accounts for 80% of all online commerce in China, bringing the term “dominance” to a whole new level. Just to compare: Amazon takes 16% of all online commerce in the US. Alibaba counts 279 million active customers (Amazon about 244 million), enjoys profit margins of 43% (Amazon struggles to break even) and, with China’s online population expected to grow to 800 million by next year, their number of customers will see tremendous growth.
Alibaba is a giant and everyone seems eager to take a bite of it.