The Gunners started the game impressively with Ainsley Maitland-Niles scoring the opener after connecting to an Iwobi cross.
The Reds rallied from behind with a hat-trick from Roberto Firmino and strikes from Sadio Mane and Mohamed Salah to condemn the Londoners to their fourth league defeat this season.
And despite the setback, the Spanish gaffer has taken positives from the encounter, hailing the Nigeria international along with goalscorer Maitland-Niles for their displays in the tie.
“There were some positives on the pitch - for example Ainsley played as a right winger and scored, working well,” Emery said in a match conference.
“Also Iwobi, after some matches not playing very well, today he played 90 minutes with a good performance.”
The defeat leaves Arsenal in the fifth spot in the league standings with 38 points from 20 games.
Iwobi who has made 17 league appearances this season will hope to help his side return to winning ways in their next game against Fulham on January 1.