The Emaar chairman Mohamed Alabbar is set to launch his online retail empire this month, creating fresh competitive challenges for traditional retailers.
Noon.com, the online market platform founded by the property tycoon, is gearing up to launch with as many as 20 million products on its site.
It comes with the retail sector under pressure from a strong dollar that is encouraging more shoppers to seek less expensive products online.
“2016 was a challenging year for retail and I cannot see 2017 being any different,” said Asma Dakkak, a research manager for JLL, the property consultants. She said the limited supply of delivered malls in Abu Dhabi last year highlighted the lacklustre shopping environment.
While 260,000 square metres of new space was delivered in Dubai, retail sales declined throughout 2016.
“Job cuts, cuts to government spending and now the rise of online commerce will contribute to a softening retail ecosystem. Bricks and mortar retailers globally, not just in the UAE, have to pivot to the generation that are used to shopping on their smartphones.”
Noon aims to drive growth in online sales in the region from 2 per cent of the total market (US$3 billion), to 15 per cent ($70bn) within a decade.
“Fashion will be at the very heart of the Noon experience,” said Mr Alabbar. “We will offer more brands and more products than any of our competitors. We will also launch with a large private label collection that will offer unmatched value to the customer. The sheer scale of our offering will also allow us to provide our customers with prices that will be impossible to beat.”
The cannibalisation of retail sales from online players looks set to increase in the UAE.
Amazon.com is now the world’s biggest retailer as e-commerce gobbles up more market share from traditional retailers.
While malls in the UAE continue to attract large numbers of leisure visitors, retailers complain many of them are not spending.
Online retailers, however, have no such complaints.
“In 2016 we saw an 11x increase in orders,” said Ulugbek Yuldashev, the founder and chief executive of Awok.com, an online retailer with 50,000 products. “I think that those orders would have previously gone to bricks and mortar players. I see Noon.com growing the market exponentially.”
ascott@thenational.ae
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