(Bloomberg)—Dubai-based business-tycoon Mohamed Alabbar formed a 130 million euro ($138 million) joint venture with Milan-based online retailer Yoox Net-a-Porter Group to profit from luxury spending in the Middle East.
The venture will be owned by Alabbar’s Symphony Investments, which will hold 40%, and Yoox Net-a-Porter, Alabbar said at a press conference in Dubai today. The Italian retailer may start selling products into the Middle East in the next 12 months, he said.
Alabbar, who is also chairman of the Middle East’s largest listed property company—Emaar Properties PJSC—is increasingly focusing on investments in technology. He is leading a $1 billion technology investment company formed with other regional investors, and also raised $1 billion from investors including Saudi Arabia’s sovereign wealth fund to create e-commerce firm Noon. He plans to start a social app similar to WhatsApp early next year. Alabbar bought a stake in regional logistics firm Aramex PJSC in July and 4% of Yoox Net-a-Porter for 100 million euros in April. Yoox Net-a-Porter is No. 78 in the Internet Retailer 2016 Top 500 Guide.
“E-commerce in the Middle East is still fresh and new, it’s 1.5% of total retail, it’s a baby,” Alabbar said. “We built Emaar into a sizable real estate company from nothing, and we need to build the next Emaar in e-commerce.”
Other investors are also starting to show interest in regional technology companies. Amazon.com Inc. (No. 1 in the Top 500) is in talks to acquire Dubai-based online retailer Souq.com FZ for about $1 billion, people familiar told Bloomberg last week. Taxi-hailing app Careem Networks FZ is also close to raising $300 million, people familiar have told Bloomberg.