Alabbar extends online reach with Yoox Net-a-Porter deal
Mohamed Alabbar has stepped up his drive to create an online shopping empire with a €130 million (Dh505.5m) joint venture with Milan-based Yoox Net-a-Porter (YNAP), the online luxury fashion retailer.
The chairman of Emaar Properties has struck his third digital deal in as many months as he stakes his claim to the region’s underserved but fast-growing e-commerce market.
The announcement comes only 15 days after Mr Alabbar launched the US$1 billion e-commerce platform, Noon.com, which is expected to begin trading in January.
He also led two investor groups in buying a combined 16.45 per cent stake in Dubai-based global logistics provider Aramex – a company that delivers large volumes of goods bought online from the region.
He had already invested €100m in reserved capital increase in YNAP this year through his Alabbar Enterprises company.
The new Dubai-based joint venture with YNAP will not start trading in the GCC for another year as it integrates its technology platforms after a merger between Yoox and Net-a-Porter that led to YNAP’s listing on Borsa Italiana in October last year.
YNAP will have 60 per cent of the joint venture, while Mr Alabbar controls the remaining 40 per cent.
“I want to promote the rewards of the digital space to private businesses and businessmen,” said Mr Alabbar. He asked why tech start-ups had to come from a garage in Silicon Valley when the 350 million people of the region could do something similar with the right support.
“If you do not have a space in the digital world you die. Our digital tech fund is part of our duty to invest, support, help and grow, yes it’s a risk but the rewards are plain to see. We expect the luxury sector in the region to grow at 10 per cent per annum, which is five times the global average.”
Mr Alabbar does not see the new YNAP incarnation as a threat to the mall.
“Our horizon for the digital space is five to 10 years,” he said. “I think we still see the same amount of luxury retailers in Dubai Mall in five years if we get it right.
“I hope to see collaboration between ourselves and the traditional luxury retailers to the benefit of both parties.”
The joint venture will initially operate in the GCC states but may be expanded to the wider Middle East and Africa in the future, it said in a statement.
Federico Marchetti, YNAP’s chief executive, said that the Middle East and China were two of the company’s most important markets where it hoped to quadruple sales by 2020. “We see luxury in the Middle East as a very high growth market that is growing more than the global market for luxury,” he said.
He said e-commerce in the region was underserved not because of the consumer but because there were not enough local e-commerce websites.
The UAE’s burgeoning e-commerce sector was further bolstered by the Landmark Group, home to Centrepoint, Splash, Babyshop and others.
It announced that its online sales channel, previously Landmarkshops.com, would now be a series of seven individual brand websites to simplify the online sales experience.
Its online sales have increased dramatically since it launched its platform in 2012. Its online offerings will be in Arabic by July and launching in Saudi Arabia in September. It now has nearly 400 staff on its digital team.
“While only 1 per cent of our sales were online in 2016, we see our customers moving to the digital space,” said Savitar Jagtiani, Landmark Group’s business head of e-commerce.
He said it was inevitable that the physical stores would have to change to become a real “omnichannel” retailer. “After only a year of operation Home Centre’s online sales are 5 per cent of its revenues. There has also been a move away from cash on delivery in the last two months, 55 per cent of online customers paid electronically,” he said.
* With reporting by Dania Saadi
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Updated: November 28, 2016 04:00 AM