skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view


Recent, major new investments and launches suggest that the Middle East’s e-commerce sector is moving into its next phase of development.

Noon is a landmark in Middle East e-commerce

As 2016 draws to a close, one striking development in the Middle East’s technology sector is that some serious money is finally being put into e-commerce in the region.

The Middle East’s most eye-catching new e-commerce initiative is, an online shopping platform that was unveiled in November and is set to launch services in January, initially in Saudi Arabia and the UAE but later across the region, with an inventory of 20 million products.

Noon is fronted by Mohamed Alabbar, a prominent Emirati businessman who is also chairman of state-backed property group Emaar, which runs the giant Dubai Mall. Noon is raising funding of $1bn from Gulf investors, with Saudi Arabia’s sovereign Public Investment Fund taking a 50% stake. PIF had already revealed a new interest in e-commerce when it acquired a $3.5bn stake in Uber in mid-2016.

Alabbar said he wants the share of the regional retail market attributable to e-commerce to rise from 2%, or $3bn, to 15% ($70bn) over the coming decade, with Noon accounting for a large part of that increase and becoming the region’s dominant e-commerce player.

Separately, Amazon founder Jeff Bezos visited the Middle East, also in November, and Amazon has reportedly been in talks to buy a $1bn stake in, which is currently the biggest online shopping site in the region.

This week, UAE-based taxi-booking service Careem revealed that it would get $350m of new financing from investors including Saudi Telecom and Japanese e-commerce specialist Rakuten. Careem was set up in Dubai in 2012 and now operates in 11 countries in the Middle East, North Africa, and South Asia. Saudi Telecom said that its new investment would amount to $100m for a 10% stake in Careem, which implies a valuation of $1bn for the tech venture.

Saudi Telecom, which was already an investor in Careem through its STC Ventures unit, is making direct investments in regional tech startups as part of a strategy of diversification into new growth areas as the telecoms market matures. Other regional operators, such as Etisalat and Zain, are pursuing similar corporate venturing strategies.

Although e-commerce has been growing in the Middle East in a small way for the past few years, it lags behind the level of development that one might expect given the high and rising levels of Internet connectivity, at least in the Gulf states.

The development of e-commerce in the Middle East has been held back by factors such as difficulties over organizing deliveries and payments, as well as a preference among regional investors for more conventional sectors, such as property.

But the scale of the new investments and plans suggest that 2017 will be the year when e-commerce in the Middle East begins to fulfill its potential.


Further reading

Middle East Market Outlook, 2Q16, Report ID TE0015-000377 (April 2016)


Matthew Reed, Practice Leader, Middle East and Africa

Recommended Articles

  • Service Provider Markets, Consumer & Entertainment Services,...

    MWC 2018 Highlights

    By Ronan De Renesse 27 Feb 2018

    Over 20 of our senior Ovum analysts and consultants attended this year’s Mobile World Congress in Barcelona at the end of February. In between meetings, briefings and presentations, our analyst team were blogging and tweeting about key developments, trends and rumors. Have a look through our daily MWC 2018 Highlights to find out what happened.

    Topics 5G AI IoT Cloud Payments SDN/NFV Smart home

  • Internet of Things

    IoT Viewpoints 2018

    IoT Viewpoints explore the IoT opportunity in 2018 and beyond. Download our latest e-book to get our newest collection of thought leadership articles on the emerging IoT trends, technologies and opportunities.

    Topics IoT

  • Consumer & Entertainment Services

    US pay TV: Is it facing an existential threat?

    By Adam Thomas 28 Mar 2018

    With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.


Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700

Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

Email us at

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 788 597 5160 or email us at

Contact marketing -

Already an Ovum client? Login to the Knowledge Center now