Emmar Properties, Saudi SWF to launch USD1 billion e-commerce platform in Middle East

Saudi Arabia: Emmar properties to launch Middle-Eastern-focused e-commerce platform Noon.com that is to go online in January 2017. The platform will be in a 50-50 joint venture wherein 50 percent will be owned by the ‘Saudi Sovereign Wealth Fund’ and the rest from other 60 regional private investors. Initially, the company is focusing on Saudi Arabia and UAE. However, the platform will will be on a global scale. Emmar Properties has previously built the world’s tallest building, The Burj Khalifa in Dubai.

Products available on e-commerce website ‘Noon.com’ will include fashion, books, home and garden, electronics, sports and outdoor, health and beauty, personal care, toys, children's and baby products. With an initial inventory of 20 million products, the company aims to expand to Egypt, the Arab world's most populous state, at the end of next year or early in 2018, followed by Kuwait and Oman in the future. The distribution centers are being set up in the Saudi cities of Riyadh and Jeddah, along with a giant warehouse of the size of 60 football stadiums in Dubai. It is also likely to use warehouses owned by Americana, which has three times the warehouse capacity of Aramex. Company also focuses on listing their platform Noon.com on stock markets after five to seven years.

Previously, Emmar Group planned to launch a social app similar to WhatsApp in the Middle eastern region. In June 2016, a U.A.E.-based investor group agreed to buy a majority stake in Kuwait Food Co., which operates KFC and Pizza Hut restaurants in Middle East and North Africa. The group is expected to make a mandatory offer to buy the remaining shares in Kuwait Food.

With e-commerce growing fast in the Middle East, the region's Souq.com, founded in 2005 as an auction site before expanding into general retail, is often described as "the Amazon of the Middle East". In February, Souq.com raised USD273 million from international investors to finance its expansion plans in the region. The venture will accept both online payments as well as cash upon delivery.

According to Techsci Research, E-commerce industry has struggled to gain a significant growth in the Middle East, despite its young and tech-savvy population, hampered by inadequate logistics and electronic payment methods. A new e-shopping Platform will enjoy high technical and logistical potential, and will open branches in several Arab countries.