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As any business journalist working in the Middle East will tell you, it’s not uncommon for companies in the region to fire off press releases that contain a lot of hyperbole, and so, our role as media requires us to take everything we are told with a pinch of salt. So, when Emaar Properties Chairman Mohamed Alabbar announced the launch of his e-commerce venture Noon in November, I admit to have been a little taken aback by the rather cheery response to the enterprise.
Sure, its initial investment of US$1 billion makes Noon worthy of notice, but for a website that has not even gone live yet, it’s hard to abide by the premise that -as a press release declared- “the online shopping experience in the Middle East will forever be changed with the launch of Noon in January.” I mean- I think it’s just too early to make those kinds of statements! After all, there has been steady growth in the region’s e-commerce sector for a while now, and it has plenty of players in its field already, with most of them being homegrown startups like Souq, Namshi, JadoPado, etc. There’s already a lot of speculation about how these companies will fare when Alabbar’s mammoth enterprise enters their domain, but then again, competition is good- although it does seem that the cards are now heavily stacked in Noon’s favor simply because of the size of the investment.
At the same time, given the fledgling startup ecosystem we have in this region, I also have to wonder: why did Alabbar have to create an entirely new e-commerce enterprise- wouldn’t it have been better to invest in an existing business in this realm? After all, there’s been reports suggesting that Souq is being eyed by Amazon for a potential $1 billion buyout, while such an exit, if it happens, will indeed be something to celebrate about, I can’t help but wonder if the ecosystem would be better served if the enterprise’s ownership would remain in the Arab world. Much like how America has Amazon, and China has Alibaba, it’d have been great to have the Middle East have a grand e-commerce venture to its own name as well. Let’s also not forget that it’s very likely that an Alabbar buyout of Souq would have also spurred the injection of more Arab investment into the startup ecosystem- we absolutely need more capital to be injected into this region.
However, this is just speculation: perhaps Alabbar did consider e-commerce ventures in the region, but they were not up to the mark that he envisioned- we’ll have to wait for another interview to confirm this. (For the record, Entrepreneur’s request for a chat with him is still outstanding.) I am curious to hear what our readers in the Middle East’s entrepreneurial ecosystem think about Noon. Did we need a whole new e-commerce site when alternatives exist and have demonstrated critical mass? Or, would it have been better for the region to have Alabbar funding the growth of one of the existing e-commerce startups? Let me know your opinions via email or Twitter.
P. S. Mr. Alabbar: if you are reading this, I’d be happy to hear your take on this! Just let me know when’s a good time to chat :)