Prominent Dubai businessman Mohammed Alabbar is teaming up with a Saudi sovereign wealth fund to launch a $1bn e-commerce platform that he hopes will "dominate" ecommerce in the region. Mr Alabbar, who separately chairs Dubai property giant Emaar that operates the city's massive Dubai Mall, wants "Noon" to drive ecommerce sales from 2 per cent of the market, or $3bn, to 15 per cent, or $70bn, over the next decade, with his new company taking the "lion's share". The site will in January launch in Saudi Arabia and the United Arab Emirates, promising to offer 20m products and fast delivery, before expanding around the rest of the Middle East. "In one move, we are launching a future-focused company which is the biggest online shopping platform ever seen in the region," said Mr Alabbar. Jeff Bezos, founder of Amazon, has been visiting the Middle East this week. He met Mr Alabbar in Dubai on Friday as well as Saudi deputy crown prince Mohammed bin Salman, who oversees PIF and is tasked with reforming the kingdom's economy. Amazon is reported to be interested in acquiring a stake in Souq.com, the largest e-commerce platform in the Middle East, in a deal that could value the company at $1bn. Noon will have its headquarters in Riyadh, as well as one of its two large warehousing facilities. The other will be based near Dubai's new Maktoum International airport. The company will set up an in-house transportation company to offer same-day delivery and its own secure payment system, Noonpay. Mr Alabbar is leading the venture, which is raising $1bn from prominent Gulf investors. Saudi Arabia's Public Investment Fund, the kingdom's wealth fund, will take a 50 per cent stake in the venture. PIF, which is playing an increasing role in diversifying the Saudi economy, has this year launched a $100bn technology investment fund with SoftBank and took a $3bn stake in ride-hailing app Uber. The platform is the culmination of several high profile retail investments led by Mr Alabbar, who earlier this year bought a controlling stake in Kuwait's Americana in a $2.4bn deal. Mr Alabbar this year also took a 4 per cent stake in Italian online fashion platform Yoox Net-A-Porter, as well as leading a group taking a 16 per cent stake in regional logistics provider Aramex, a key element within the e-commerce supply chain. Interest in e-commerce has been increasing for years, but despite 25 per cent annual growth rates, it has failed to break the stranglehold on the mall-focused shopping experience in the Arab Gulf states. Expensive logistics chains, which are exacerbated by barriers among regional states, have undermined ecommerce businesses. Noon hopes that its scale will overcome these issues. Source: Financial Times
