Amazon and Noon, who is the final winner?
In addition to the recent news that Amazon will launch new operations in Belgium, Nigeria and South Africa, several recent announcements suggest that Amazon is simultaneously developing and strengthening its presence in the Middle East.
Examples include the launch of the Global Delivery Service Partner Program in Saudi Arabia this month and the opening of a new distribution center in Abu Dhabi, the capital of the United Arab Emirates.
Since 2017, Amazon has opened Amazon sites in Saudi Arabia and the United Arab Emirates after acquiring Souq. It is also through the power of Souq that Amazon entered these two countries effortlessly.
Of course, Amazon is not the only e-commerce platform vying for the Saudi Arabia and UAE markets. Noon, a native of Arabia, bills itself as a “Arabic First” shopping platform.
In both countries, Noon offers a wide range of products covering industries such as electronics, fashion, home and kitchen, beauty and groceries. Like Amazon, shoppers can make purchases on the web or through an app on a PC.
In terms of logistics services, Noon has traditionally outperformed Amazon in delivery and fulfillment services. It offers same-day and next-day delivery options for many items, and has Noon’s own express lockers throughout Saudi Arabia and the UAE.
In terms of supply chain and fulfillment, from the beginning, Noon has established partnerships to address the specific needs of the local market, with Noon’s suppliers in the region including Kuwait’s Alshaya Group and Saudi Arabia’s eXtra. This makes it look a little different from Amazon.
What’s more, since Noon signed an agreement with eBay in 2018, Noon has offered Middle Eastern customers the opportunity to purchase products from the US and the rest of the world, with Noon fulfilling them.
But in terms of regional distribution, not everything is smooth sailing. In Saudi Arabia, for example, inaccurate and inadequate street addressing systems make last-mile deliveries difficult.
To address this, Noon developed its own internal address system, which assigns each customer a unique geotag.
And two recent announcements indicate that Amazon is moving to build its own logistics bases in Saudi Arabia and the United Arab Emirates. To that end, the e-commerce giant appears to have made a strategic decision to partner with local business authorities.
Earlier this month, Amazon announced the launch of a global DSP program in the country at an event at the headquarters of Monsha’at (Saudi Arabia’s Small and Medium Enterprise Authority) in Riyadh. The DSP program is operational in the US, Canada, UK, Spain, Germany, Italy, Ireland, Brazil and India to help local businesses set up and manage Amazon fulfillment services.
The opening of its largest delivery station in Abu Dhabi aims to enhance the company’s ability to provide faster Amazon Prime delivery to UAE consumers.
Amazon also intends to partner with the Abu Dhabi Investment Office (ADIO) to open a new “technically advanced” fulfillment center, in line with the UAE’s goal of achieving net-zero carbon emissions by 2050.
Expected to launch in 2024, the new fulfillment center is part of an ongoing collaboration between Amazon and ADIO to support local startups and SMEs in the distribution space and further expand the company’s presence in the UAE e-commerce market.
Against the backdrop of Noon’s established network of local suppliers and proprietary last-mile fulfillment solutions, Amazon’s latest move looks like a bold challenge from a multinational company that clearly intends to cement its market-leading position in both countries.
The companies will also see Egypt as a potential battleground for hegemony, as its large consumer base and vast untapped potential make it an attractive new market.
Amazon entered the Egyptian market with the acquisition of Souq, but it is the last of the three countries in which Souq operates to fully transition to Amazon-owned sites.
Meanwhile, while Noon entered Egypt just a year after its launch in Saudi Arabia and the UAE, the company has so far only made the strategic decision to double down on its core market before shifting resources to regional expansion. put in. That being said, Noon has made no secret of its ambitions in the Middle East and North Africa.
