The United Arab Emirates real estate developer’s retail arm, Emaar Malls, has acquired over 50% of fashion e-commerce platform Namshi. A press release was released yesterday stating “Global Fashion Group (“GFG”) [owner of Namshi] has announced today a strategic partnership with Emaar Malls (DFM: EMAARMALLS), the shopping malls and retail business majority-owned by property developer Emaar Properties.”
According to the press release, the deal has been sealed with an all-cash transaction of USD $151 million, including financial investments and support from Emaar for future growth.
This is not the first time that Emaar Malls, developer of Dubai Mall, has tried to enter the digital world of e-commerce. A few months ago, Emaar Malls’s bid, which is said to have been USD $800 million, to buy MENA e-commerce platform Souq.com failed as the deal was taken by international e-commerce site Amazon for USD $650 million.
Emaar Malls has been picking itself up from the defeat, buying a large stake in the regional logistics company Aramex before the Namshi deal. A source told Tech Crunch that Mohamed Alabbar, founder and chairman of Emaar Properties, is also planning to invest around $2 billion to a range of startups within the region, but this has not been officially confirmed.
“The acquisition of a majority stake in Namshi underlines our digital-driven strategy to leverage the growing e-commerce market in the Middle East and North Africa region,” said Alabbar in a statement. “Namshi offers a perfect fit for Emaar Malls in accelerating its focus on multi-channel retailing, and creating long-term value for its stakeholders.”
Launched in 2012, Namshi is the region’s leading online platform for fashion (not available in Egypt, at this time). The company has over 600 brands available and is an exclusive distributer of many exclusive international brands. The organization behind Namshi, Rocket Internet who continues to maintain a 49% stake in Namshi, also has a stake in regional e-commerce site Jumia.
At the end of last year, Namshi released a statement that announced they had received their first full year of profitability. Announcing a 555 million UAE Dirham profit, equivalent to $151 million which is what Emaar malls has paid for only half of the online platform, the company is well underway to becoming a major contender in the region’s e-commerce market.
This creates an interesting future for the MENA region when it comes to the region’s e-commerce market. With Amazon’s reach now extended to the MENA region through Souq.com and Emaar set to invest high amounts of capital to improve and cultivate Namshi, the competition is becoming fierce.