DUBAI (Reuters) - Prominent Emirati businessman Mohamed Alabbar said on Sunday he had teamed up with Saudi Arabia’s Public Investment Fund (PIF) and other private investors to launch a $1 billion Middle Eastern-focused e-commerce platform.
Noon.com was 50 percent owned by the Saudi sovereign wealth fund, Alabbar said at a news conference in Dubai, while the other 50 percent was owned by him and other regional private investors, which he declined to identify.
“This is going to be on a global scale,” Alabbar said. PIF, and the other investors had so far put a total of $1 billion towards the project, he said.
E-commerce has struggled to gain a significant foothold in the Middle East, despite its young and tech-savvy population, hampered by inadequate logistics and electronic payment methods.
Noon.com will launch operations in Saudi Arabia and the United Arab Emirates in January, with 20 million products on the platform, Alabbar said. The company plans to expand to Egypt, the Arab world’s most populous country, by late 2017, and is also looking at Kuwait and Oman, though Alabbar did not give a timeframe.
To compensate for issues around electronic payments, the venture will accept both online payments as well as cash upon delivery, Noon.com’s chief executive Fodhil Benturquia said.
According to his LinkedIn profile, Benturquia served as a former executive at Middle East e-commerce platform Souq.com.
The Riyadh-headquartered company, which takes its name from the Arabic letter ‘noon’, is targeting profitability within five years and a possible stock market flotation within five to seven years, Alabbar said.
Alabbar made his name as chairman of Emaar Properties EMAR.DU, the Dubai government-linked builder of the world’s tallest building and whose subsidiary Emaar Malls EMAA.DU owns and operates Dubai Mall, which accounts for around 50 percent of the emirate’s luxury goods spending.
In recent months he has made several investments which would support an e-commerce platform, including buying stakes in Italian online retailer Yoox Net-A-Porter YNAP.MI (YNAP), Dubai-listed logistics firm Aramex ARMX.DU and Kuwait Food Co FOOD.KW (Americana).
Noon.com will use Aramex’s and Americana’s logistic capabilities to deliver goods, Alabbar said.
Alabbar also confirmed local media reports that he recently met with Amazon (AMZN.O) founder Jeff Bezos in Dubai.
“It was a friendly meeting. They came around to explore what’s going on in the Middle East,” he said.
PIF also recently made technology-related investments, including the purchase of a $3.5 billion stake in ride-hailing app Uber in June and a pledge for 45 percent of funding for a $100 billion tech investment fund with Japan’s SoftBank Group (9984.T).
Editing by David French and Raissa Kasolowsky