High Noon for online shopping in the Middle East

E-retailer’s launch the latest step in the digitisation of the UAE’s economy

The Mena region's e-commerce market is set to double by 2021, but shopping destinations like the Dubai Mall are unlikely to disappear any time soon. Reem Mohammed / The National

It seems that 2017 will be a watershed year for online shopping in the UAE. After a long period of silence, Noon, the $1bn e-commerce startup backed by Emaar Properties chairman Mohamed Alabbar, finally opened for business in the UAE, selling a range of goods that include electronics, groceries, fashion and home and kitchen products.

Noon's launch in the UAE  –  to be followed by a Saudi launch in the coming weeks -  comes a month after the sale of Amazon products in the country for the first time via Souq.com, which Amazon acquired in March.

Neither services is going to put the country’s bricks and mortar retailers out of business any time soon, given the centrality of malls in the UAE’s social and economic culture. Old shopping habits are unlikely to change overnight.

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But the arrival of two heavyweights like Noon and Amazon promises to kick start e-commerce in a big way in the region; BMI Research forecasts that the region’s online retail market, while still small compared with the rest of the world, will double in size to $48.8 billion by 2021.

Retail is just one sector in the UAE’s economy that is undergoing a transformation as a result of disruptive digital technology.  Mashreq yesterday announced the launch of its online-only Mashreq Neo banking service, targeted at millennials, which does away with the need for physical branches and branch staff. Abdul Aziz Al Ghurair, the bank’s chief executive, last month said the bank plans to shed 10 per cent of its workforce over the next year.

Du and Etisalat have also launched digital only offerings, in the form of Virgin Mobile and Swyp respectively. Such services are designed not only to appeal to young and digital savvy customers, but also to see whether such digital only products can point to savings elsewhere in the telcos’ business lines.

Such a trend will significantly impact jobs, the consequences of still yet to be determined, both in the the Middle East and beyond. But for now the region's customers can celebrate the launch of Noon and other services that promise a more convenient and less expensive shopping experience.