In December 2018, we made a series of tech & internet predictions for different regions: Southeast Asia, India, Latin America & Middle East. 

As 2019 draws a close, let’s review these predictions: how many did we get right? Which ones did we get terribly wrong? And which are the ones that are too hard to tell?

Let’s look at Middle East in this post. As usual, we highlight those we predicted accurately in green, those we got wrong in red, and those which are not clear cut in blue.

1. Uber and Careem consolidate;

We wrote: “We don’t really care who buys whom (although we think Uber buying Careem is the more likely outcome), the consolidation makes sense for both parties.”

Uber announced the acquisition in March. 

2. Big logistics companies invest more in ecommerce logistics

The small, but potentially very profitable, ecommerce logistics scene in Middle East is getting more crowded. Agility, DHL and Naqel are all either expanding capacity or building new facilities. 

In the meantime, both Fetchr and JollyChic (which built its own logistics), went through tough times. Noon and Souq are both strengthening their own logistic capabilities. 

3. Amazon rebrands Souq.com;

It happened in UAE during the first half of the year; although for various reasons the same exercise for Saudi Arabia is taking much longer time. 

4. Noon solves some major issues preventing its effective growth

Noon is clearly growing, fast. Although there is a lot of chatter about how sustained this growth is – users do feel that they get their goods cheaper and faster. In the short term, they are happy. 

5. More consolidation of online-offline, led by big groups (who have had a fair number of failures trying to penetrate into ecommerce)

It is good that you see some of the traditional retailers not obsessed about ecommerce anymore, but taking a realistic look to see how to maximise their channel and assets. 

That said, whether the online-offline strategy actually works in the region is still a question mark – it depends on a lot of factors, and the rapidly changing ecommerce landscape probably does not help. 

6. More fierce competition for consumer traffic pushes up the prices for influencers;

The estimated (potential) price of Huda Kattan’s post has increased from US$33k to almost US$100k. 

On the other hand, Boutiqaat has doubled its valuation to US$500 million. 

7. Everyone goes back to the third Future Investment Initiative summit – BAU;

We were there, too. And we see a lot of delegates from China, to an extent that Chinese interpretation is actually provided throughout the conference. 

Not many people paid attention to Masayoshi Son on stage. He attended a panel, though Rajiv Misra and some of their portfolio spoke much more. 

We said last year “predicting the oil prices is not one of our strengths at Momentum Woks. At least not yet ?”. This year, we resisted our temptation to predict Aramco share prices. 

One thing for sure is that Saudi Arabia is opening up, in a very encouraging pace. We liked the Minister’s comment on FII: “The message for the first FII was Saudi Arabia is open for business; for the second FII was Saudi Arabia is open for culture and entertainment; this time the message is Saudi Arabia is open for innovation.” 

8. Chinese money-burner ecommerce wave recedes, JollyChic remains;

JollyChic received a significant round of investment from Abu Dhabi’s based G42 earlier this year; however, as the year end approaches, some leaked internal emails suggest that it still has not fully recovered. 

On the other hand, many of the VC-backed Chinese contenders went quiet. ForDeal’s founders are emulating SheIn – keeping a low profile while focusing on growing the business. SheIn is doing super well – doubling the overall sales from last year. Maybe it will IPO next year. 

9. Competition intensifies for people’s screentime, with social and video apps fighting a bitter battle; Content producers (including Netflix) invest heavily

The trend continues. And Yalla, a Chinese app, is rumoured to be preparing for US IPO. 

10. More acquisitions create more serial entrepreneurs (who made money through exit to build something else)

You just need to look at Careem, and at least the companies in Egypt that was founded by ex-Careem executives and funded by Careem investors. 

Conclusion 

As we were talking to our friends over the sidelines of FII in Riyadh this October, we get a strong sense of optimism. The economy, which has been going down for a number of years, will probably hit the bottom soon (and presumably start rebounding); the steady opening up of Saudi Arabia and the KPI driven culture of the public sector have created a lot of opportunities in the meantime. 

In the meantime, this created interesting competitive dynamics for Dubai. The Expo is coming in 2020 – and it is really interesting to see how all these dynamics play out. 

Nonetheless, very, very good time to start building.