Mohamed Alabbar is best known for his role as chairman of Emaar Properties, but two decades after founding the real estate giant, Mr Alabbar dived into e-commerce with the launch of the $1 billion e-commerce platform Noon.com in 2017.
“It’s the biggest risk in my life that I’ve taken,” Mr Alabbar said yesterday at the annual entrepreneurship summit organised by TiE Dubai, the local chapter of The Indus Entrepreneurs founded in Silicon Valley.
“For me to be able to even be brave enough, after making billions in my real estate business, I really [didn’t] have to go into digital. Why should I? I’m sitting on an amazing company, amazing balance sheet, amazing powerhouse. Why should I go and take a risk?” Mr Alabbar said.
Two years ago, Mr Alabbar had made an 11th-hour bid to acquire Souq.com – the region's leading online retailer, founded in 2005 – but it was bought by Amazon for $580 million. Shortly thereafter, he bought Noon, financed with Saudi Arabia's sovereign wealth fund, Public Investment Fund, and other private investors.
Noon has faced a challenge to compete with Souq. The risk, however, has the potential to reap big rewards. The Middle East e-commerce market is estimated to be worth $48.6bn in 2022, up from an estimated $26.9bn in 2018, according to a report by Fitch Solutions.
Mr Alabbar said now "the digital economy is a fact of life", but competition is fierce with global giants such as Amazon, Alibaba and Flipkart dominating the market.
“Especially in digital and e-commerce, if you don’t have the muscles – the technology, financial power, the best people you can get – you die, and you die quickly,” he said.
“Globally, if you look at e-commerce, how many companies in this giant country called India? Two. How many in China? Two. How many in America? One,” he said.
He still believes the region has an opportunity with its youth and the capital available, and that creating home-grown e-commerce brands should be a priority.
“The great news is that we in the region have the highest percentage of young people, and that is really the fuel of our future,” Mr Alabbar said.
It is often the case that there is a market player that struggles and another that takes over, he said.
“I cannot accept that our region will be taken over. I will not accept it,” he said.
Mr Alabbar has continued to expand his group's online and geographical footprint. Last month Emaar Malls, a unit of Emaar Properties, acquired the remaining stake of online fashion retailer Namshi for Dh475.5m ($129.5m). The Dubai-listed company first bought a 51 per cent stake in Namshi for $151m in 2017.