Alabbar says Noon.com to shift hub from Dubai to Saudi
In a statement this week Dubai businessman Mohamed Alabbar said his new US $1-billion e-commerce site Noon.com is “on track” to begin operations in 2017 and will shift its primary logistics hub from Dubai to Riyadh.
Noon.com’s Distribution Centre in Dubai South is completed and is being used for beta-testing, but has not yet been officially launched. The company was meant to go live in January but has faced unspecified delays.
There has been speculation that the delays are the result of Amazon’s acquisition of SOUQ.com. Emaar Malls, also owned by Alabbar, had tried to stall the acquisition by making a counter offer for Souq.com of US $800 million, but SOUQ’s shareholders rejected it.
Alabbar said that Noon.com would now launch this year, but did not provide a specific date, or even indicate which quarter the launch would occur in. When it does launch, it will compete directly with Souq.com, which may be why it is shifting its HQ to Saudi Arabia.
“Following the launch of Noon, our permanent operational base will be in Riyadh, and we are currently scaling up our resourcing and operations there. This allows us an excellent opportunity to bring into the organisation some of best new young Saudi talent working in this field,” Alabbar said.
As per its original intentions, Noon.com plans to soon launch across the Middle East region. It aims to grow online sales in the region from 2 per cent of the total market ($3bn), to 15 per cent ($70bn) within a decade. SOUQ.com’s last mile fulfilment infrastructure is concentrated in the UAE though, and so it is likely that Noon sees a gap in the market in KSA.
Alabbar did not address any of this speculation directly, and has not commented on the Amazon-SOUQ deal, but did stress that Noon.com would be bringing its own innovative logistics solutions to the market.
“Our beta programme has been very insightful, and all the feedback we received from our early customers has allowed us to test and refine our technology and fulfilment model,” he said.
“It is vital that all our systems and processes work at the highest possible level. The coming months will be spent to ensure this, particularly with some of the many supply chain innovations we have been developing,” Alabbar added.
The company initially promised 20 million products when it came online covering fashion, books, home and garden, electronics, sports and outdoor, health and beauty, personal care, toys, kids and baby products.
It said it will feature mass-market megabrands and discount giants and pledged to have “the fastest delivery times” through its in-house delivery platform.
“We are establishing strategic partnerships with an extensive range of regional retailers, distributors and global brands,” Alabbar said in the statement.
“These partnerships will allow Noon to provide its customers with a broad catalogue of product across categories. With Noon, we aim to deliver an e-commerce platform that creates long-term economic value, is truly relevant to the region and supports its home-grown enterprises.”