Dubai's Alabbar, Saudi plan to launch $1bn e-commerce site Noon.com

Dubai business magnate Mohamed Alabbar announced on Sunday the launch of a $1bn regional e-commerce site in a joint venture with the Saudi sovereign wealth fund and other Gulf investors.

Noon.com is to go online in January with a 50 percent investment from the kingdom's Public Investment Fund (PIF) and the rest from about 60 investors led by Alabbar, who heads the emirate's real estate giant Emaar.

He told a news conference that distribution centres are being set up in the Saudi cities of Riyadh and Jeddah, along with a giant warehouse the size of 60 football stadiums in Dubai.

"We expect to become a world player but will concentrate firstly on Saudi Arabia and the United Arab Emirates," said the president of Emaar, the company that built the world's tallest building, the Burj Khalifa in Dubai.

With an initial inventory of 20 million products, the online retailer aims to expand to Egypt, the Arab world's most populous state, at the end of next year or early in 2018.

Alabbar, cited by Bloomberg, said Noon would be traded on stock markets after five to seven years. It aims to be profitable within five years.

Alabbar also confirmed local media reports that he recently met with Amazon 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.

Products will include fashion, books, home and garden, electronics, sports and outdoor, health and beauty, personal care, toys, children's and baby products.

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.

With e-commerce growing fast in the Middle East, the region's Souq.com, founded in 2005 as an auction site before expanding into general retail, is often described as "the Amazon of the Middle East".

In February, Souq.com announced it had raised $273m from international investors to finance expansion plans.

PIF also recently made technology-related investments, including the purchase of a $3.5bn stake in ride-hailing app Uber in June and a pledge for 45 percent of funding for a $100bn tech investment fund with Japan's SoftBank Group.