Mohammad Alabbar, chairman of Emaar Properties, has his eyes set on the digital space.
He has spoken about the importance of producing digital content in the Arab world and his company, Alabbar Entrpises, invested millions in an online fashion retailer earlier this year. Now Alabbar and a group of Gulf investors have reportedly purchased a stake in Aramex, the Dubai-listed delivery company.
According to a report from news agency Bloomberg on Tuesday, Aramex founder and vice-chairman, Fadi Ghandour sold his 9.9 per cent stake in the company to Gulf investors including Alabbar. The purchase was made through Alabbar Enterprises, and the stake was worth around Dh523 million [$142 million approximately] at Monday's closing price, the Bloomberg report added.
"[The transaction] really sends a message across to business entities who are involved in eCommerce in the country because the strategy is clear. This is where the country wants to be," said Nikola Kosutic, research manager at consultancy Euromonitor International.
Access to a package distribution company could help Alabbar build an online business, analysts say. Over the past 10 years, eCommerce companies have struggled to find ways to integrate their online retail systems with an affective delivery organisation.
"Parcel delivery is the key ingredient to push forward development of eCommerce in the UAE," Kosutic said.
The UAE eCommerce market is expanding, as online shopping grows. But it is still underdeveloped compared to international markets. Internet retailing accounts for 1.7 per cent of the retail market in the UAE, Kosutic said.
"eCommerce is under developed in the country, which means that the potential is quite high," he added.
The move by Alabbar comes after Alabbar Enterprises purchased last April a €100 million (Dh403 million) stake in online luxury fashion retailer Yoox Net-A-Porter, which owns six multibrand shopping websites including Net-a-Porter.com.
Last June, Alabbar said the internet is the future of trade, where websites now enjoy far more margins than traditional companies at the majlis of His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.
"What's the solution? Where are we headed to? I suggest that we invest at least 5 per cent of our investments in existing Arab institutions in the area of technology. Because in terms of profit they are better, they are the future," he said.
Alabbar Enterprises is the parent company of a variety of retail, food and beverage, and eCommerce franchise operations across the Middle East and Asia, according to its website. Its portfolio of brands includes Candilicious, Symphony, Oscar de la Renta and fashion website Sivvi.com, among others.
Adeptio AD Investments, a group led by Alabbar, bought a stake in the company known as Americana from Al Khair National for Stocks and Real Estate Co last June for $2.36 billion.
By Sara Algethami