If you live in the UAE now, something very exciting is happening in the online world!
If you have been driving down Sheikh Zayed Road or residing in a Emaar Community, you would have spotted large signs of Noon on buildings that glow with an effervescent yellow color in the night.
For a region that is still lagging behind in terms of e-commerce share of the total retail market, for a pure-play online marketplace to be promoted in the real world with the might of Emaar is the “sign” of good times.
Noon, as we all know is in a battle with Souq to gain the maximum share of a market that is growing at 23% and predicted to be worth $69 billion by 2020. It all started on March 28th 2017, when Amazon entered the Middle East market by confirming that it had acquired Souq, which called itself ‘the Amazon of the Middle East’.
The Souq-Amazon story
Souq is a homegrown success story. With this acquisition, Amazon can directly leapfrog into the crucial Middle East markets of Egypt, the UAE and Saudi Arabia, where Souq has already established local operations. Amazon decided to enter the Middle East market with the acquisition of Souq, because customer acquisition in a new market is a time consuming affair. Moreover, Amazon would be able to mitigate risk, since it would have direct access to about 75,000 merchants of Souq, who have a wide assortment of products across several categories. In addition, Souq gave Amazon access to a successful and refined order fulfillment operation, and also access to Souq’s popular online payment gateway, Payfort. All in all, an ideal acquisition.
The Noon challenge
Noon.com is being aimed at being a homegrown, Arabic-first marketplace that offers customers in the Middle East with a real competitor for Souq. Way back in April 2016, Emaar stepped up its drive to create an online shopping empire with a €130 million (Dh505.5m) joint venture with Milan-based Yoox Net-a-Porter (YNAP), the online luxury fashion retailer. Further, Emaar and two investor groups bought a combined 16.45 per cent stake in Dubai-based global logistics provider Aramex – a company that delivers large volumes of goods bought online from the region.
In early 2017, Noon.com entered into a strategic agreement with Saudi-Arabia’s United Electronics Company (eXtra), the leading electronics store with 35 stores across Kingdom of Saudi Arabia and 1 store in both of Bahrain and Oman.
In the middle of 2018. Noon.com partnered with eBay to offer customers in Saudi Arabia and the United Arab Emirates a way to more easily buy products online from the U.S. and other parts of the world. According to Logistics Middle East, Noon will now fulfill all eBay orders made via Noon and deliver the purchases to customers in the Middle East. This means less shipping costs and faster delivery, according to Noon. The eBay partnership can be attributed to Souq starting to provide customers access to millions of international products that are shipped via Amazon’s logistics networks.
How do the statistics stack up? A SimilarWeb comparison of the traffic and engagement of the two sites in May-July 2018 throws the following:
Well, Souq has 7 times more traffic than Noon in the last 3 months.
But when it comes to engagement summary, check out the Visits/Unique Visitors, Average Visit Duration, Pages/Visit and Bounce Rate and you will see a very close race there.
The Real Thing
The might of global giant Amazon is being pitched against the ambition of a local, semi-government backed start-up. And when something like this happens, the ultimate winner is the customer.
And customers are acquired and retained in e-commerce based on the following:
- Product Discovery :
- How good is the Search feature?
- How easy it is to navigate?
- How is the UI/UX till you land the product you are looking for?
- Purchase Process :
- How swift is the Shopping Cart process?
- How easy is the checkout procedure?
- Delivery :
- What is the delivery lead time?
- How smooth was the delivery process i.e. last mile?
- Service :
- What is the process and speed of Returns?
- Is there a no-nonsense Refund?
It is very difficult to master all of the above and that is why this is an interesting battle to watch.
Customer is King
Both Souq and Noon are homegrown, pure-play e-commerce brands. And that is an important statement. Souq must be credited for being Middle East’s first unicorn which took years of perseverance and determination in the face of rejection from a market that took long to adapt online. Souq now, has leapfrogged miles ahead, after the head-start and with now the blessings of the world’s greatest online company.
Noon has made all the right moves to make it the strongest contender amongst other marketplaces. When you order a product from Noon, you will be pleasantly surprised. Delivery experience is what separates the men from the boys in e-commerce since it is the first physical, and some would say, the most important customer touchpoint — the moment of truth. The speed of delivery, packaging, the neatly enveloped invoice is a customer delight.
Add to that the Noon signs all over the city, the search & display advertisements and you know you are in the midst of a country where something exciting is happening.