$1bn E-Commerce Platform to be Launched by Alabbar & PIF
Emirati businessman, Mohamed Alabbar and Saudi Arabia’s Public Investment Fund (PIF) are teaming up to launch the region’s biggest e-commerce platform, Noon.com, at an initial investment of $1 billion. CEO Fodhil Benturquia, who was previously leading Souq.com’s operations in Saudi Arabia, will lead the venture.
“We're turning the e-commerce environment in Middle East upside down," Alabbar said, "and then we're going to turn it upside down again in another six months."
Noon will go live in January with 20 million products to offer, ranging from electronics to fashion to home/lifestyle. Based in Riyadh, Noon will initially operate from and focus on Saudi Arabia and the U.A.E. prior to expanding across the region.
The e-commerce venture will offer same-day delivery by using Aramex's and Americana's logistic capabilities to deliver goods. To address regional issues around electronic payments, the venture will accept both online payments as well as cash upon delivery, and will be introducing its own secure payment gateway, Noonpay.
PIF owns a 50% stake in the venture and AlAbbar and a consortium of investors are holding the remaining 50% across the GCC countries of UAE, Saudi Arabia, Bahrain, Kuwait, Qatar, and Oman.
In recent months Alabbar has made several investments which would support an e-commerce platform, including buying stakes in Italian online fashion retailer Yoox Net-A-Porter (YNAP), Dubai-based courier Aramex, and led a group of investors to a buy a stake in Kuwait Food Co (Americana), in one of the biggest acquisitions in the region this year, for $2.5 billion.
PIF’s investment strategy aim to help the Saudi government diversify the economy away from oil, has 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.