Mohamed Alabbar, the proud billionaire real estate tycoon and chairman of Emaar Properties, responsible for building the Burj Khalifa has collaborated with the Public Investment Fund (PIF) of Saudi Arabia along with other private investors. The result is Noon.com, an ecommerce site, worth a billion dollars. Noon.com will be 50 percent owned by Alabbar and a set of unnamed private investors from the region, while the other 50 percent will be owned by the Saudi’s sovereign wealth fund, the PIF.
The sheer size of the investment, a billion dollars, will make Noon.com one of the most valuable ecommerce sites in the world, even before it’s launched. Alabbar has further announced that Noon will be a global ecommerce site.
Traditionally the Middle Eastern consumer has been less receptive to tech and ecommerce oriented startups. Supporting infrastructure for ecommerce companies to succeed, like logistics and online payment methods are not as effective and established as they are in other regions like the US, Far East Asia or even India. However the landscape is changing with tech savvy millenials, increased interest in alternate investment opportunities outside real estate development, and a state push to rely on income not so entirely dependent on oil exports.
Noon is expected to launch with 20 million products on its platform in January 2017 both in the UAE and Saudi Arabia. Cash on delivery will be an option to counter inadequate online payment support, although online payment is an option too, according to chief executive of Noon, Fodhil Benturquia.
For delivery of products, Noon is expected to use Aramex and Americana as logistics partner. Alabbar was reported as purchasing a stake in each of these companies by Bloomberg in July of this year.
Prior to this Benturquia was with rival ecomm platform from the region, Souq.com. With the announcement of Noon, an online publication from the Gulf reported the Souq CEO as saying that they are not worried about its yet to be launched competition, and that there is enough space in the region for multiple players to maintain business.
Expand plans then target Egypt in the latter end of 2017, followed by Kuwait and Oman.
In the meantime, Noon will be based in Riyadh, the capital of Saudi Arabia, and according to Reuters, Alabbar has also announced that the ecomm will be aiming to achieve profitability in about five years with a possible IPO in five to seven years.
Alabbar is leading the way for other large-ticket investors in the region for investing in ecommerce and IT oriented companies. He also has a stake in Yoox Net-A-Porter, an Italian luxury ecommerce player.
Reuters further reports the tycoon had a “friendly meeting” with Jeff Bezos, founder of Amazon, the pioneering ecommerce company. Bezos was reportedly in Dubai scouting the region for further opportunities.