Founder of e-commerce venture Noon, Mohamed Alabbar, has revealed ambitions to invest a further $2 billion in the digital marketplace over the next three years in order to reach a goal of delivery to customers within 15-20 minutes.
Originally launched in Riyadh, the platform was brought to life by Alabbar four years ago in a joint venture with Saudi Arabia’s Public Investment Fund (PIF) and a group of prominent Gulf investors, with an initial capital outlay of $1bn.
He said the new investment would be a 50-50 split between himself and his investors, and the PIF.
“I’m happy where we are, but ahead of us is very challenging because now we have to do 15-20 minutes delivery, which is a big infrastructure change for us.
“The type of investors we have are quite happy with our progress and they’re quite happy to fund. The $2bn isn’t going to be in one night. You probably need it over three years or four years.
“But when they see the performance of the investment and the performance of the team, they’re quite happy to do that.”
The Middle East has been slower to adapt to e-commerce than other regions, although lockdowns to combat the coronavirus pandemic last year have accelerated the shift to online shopping and food delivery. Alabbar said e-commerce currently accounts for 2 percent to 2.5 percent of total retail in the region, compared with 20 percent to 22 percent in the western world and China.
Alabbar revealed that there are just over four million daily users of Noon, which is growing “on a monthly basis”; while the volume of package delivery is increasing every year by two-and-a-half times.
The global entrepreneur, who is also the founder of Dubai-based Emaar Properties, the developer of assets such as Dubai Mall and the Burj Khalifa, previously told Arabian Business in 2018 that he planned to float Noon on the stock market in a global cross-listing “within the next four to five years”.
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Mohamed Alabbar, founder of e-commerce venture Noon.
However, while he said an IPO was still part of the plans, there was no immediate timeline for any listing.
“I think, to be honest with you, the way you look at interest rates nowadays, it’s just so low, it would be such a great idea to go to the banks and do that, so yes I think that’s a great thing on the table. Not now, but at the same time, I think IPOs, that’s how the world is going and valuations are looking good, so I think we as shareholders should keep an eye on IPO as well and after four years of performance, five years, six years, I think there’s nothing wrong with that,” he said.
“It’s not been discussed. The reason is the company is so valuable and it’s growing so well and you say fine, maybe, but not now.”
Noon originally launched as an online retail platform, selling everything from fashion brands to electronics and home appliances. It has since opened up Noon Daily, a grocery service; as well as the company’s own ‘on-demand’ platform, Now Now, which gives customers the ability to shop from their local neighbourhood and get their items within minutes; and a food delivery service, Noon Food.
Noon currently operates in Saudi Arabia, the UAE and Egypt, although Alabbar said further plans include taking the platform throughout the entire region.
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The volume of package delivery is increasing every year by two-and-a-half times.
He said: “I think we should be in the Middle East because I think the technology is running, the logistics are running, people are there, we just need to get more talent and that’s a challenge for us.
“We are hiring all the time. I don’t have any numbers to share but I can assure you we are hiring a lot.”
Noon currently has around 18,000 employees, with plans to hire “at all levels”, said Alabbar, who was speaking at the annual Noon Seller Summit in Dubai Opera, where the dates for this year’s eagerly anticipated Yellow Friday sale were revealed (November 22-28).
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