When thousands of people gathered in the centre of Dubai to celebrate the unveiling of the world’s tallest tower on January 4 2010, Mohamed Alabbar, the man credited with building the historic structure, sat quietly in the front row.
He was planning his next move. E-commerce.
“The Burj was over. I was thinking where to go, what to do next?” the chairman of Emaar Properties told Arabian Business in 2011.
A few years later, when regional investors cheered and applauded US tech giant Uber’s decision to acquire Middle East ride-hailing star Careem for $3.1 billion, Alabbar, unlike overwhelmingly positive investors, was also quiet.
Last week, we found out his next big move: giving Uber a run for its money – with the help of China.
On the sidelines of the visit of Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, to China, Emaar chairman and Noon founder Alabbar revealed his partnership with the world’s largest comprehensive one stop mobile transportation platform - and Uber’s biggest rival - Didi Chuxing.
Alabbar’s Symphony Investments and other institutions signed an agreement with the Beijing-based platform to set up a joint venture headquartered in Abu Dhabi, with an aim to promote the sharing economy and consumer service across the MENA region and China.
Just when Uber thought it could stifle competition in the Middle East, here comes Alabbar. And why not? The Middle East is big enough for two; albeit, Uber didn’t seem to think there was enough room for both its operations and Careem’s.
So if I was Uber, I’d be worried. Here’s exactly why: Didi Chuxing has 550 million users and conducts 30 million rides per day, dwarfing US giant Uber which has just 93 million users and conducts 17 million trips per day in comparison.
And while Didi is available in less cities (400) as opposed to Uber’s 700, imagine the possibilities of its MENA expansion.
Aramex founder and Wamda Capital executive chairman Fadi Ghandour agrees: “There is no winner takes all. When the market has one player, it will always attract others, just like Careem and Uber shared the market before merging,” he told Arabian Business.
With Didi entering the market, Uber will have to make space, or move over.
But as Alabbar noted during his China visit, this has to do with much more than healthy competition.
“Chinese companies treat you as a partner, unlike American companies who come in, make their profit and leave,” said Alabbar.
He has a point. In 2018, a few months after Amazon acquired Dubai-based Souq.com for $580 million, Will Hutson, founder and CEO of creative agency LMTD told Arabian Business that foreign acquisitions are “just going to pass the buck, maybe even drive some headlines.”
He said the majority of the rewards from acquisitions are leaving the UAE through dividends and profit, and hinted that foreign investors may be using acquisitions to optimise their taxes and corporate footprint.
But that’s about to change.
Just the beginning
Helping the Middle East take back its fair share of its ride-hailing business is just the beginning of China’s promising affair with the region.
In the first quarter of this year, the value of trade between China and Dubai alone totalled a whopping AED36 billion ($9.8 billion), according to Dubai Customs, with telecoms, phones, PCs, aluminium, gold, automobiles, and engines topping the list of the most traded commodities between the two parties.
This is not to mention the signing of a number of agreements between the two countries, spanning a range of sectors including defence, trade and investment, environment and sustainability, education, ports and customs, and energy.
China is even helping the Middle East take on Starbucks. The man behind the deal? You guessed it: Alabbar.
Kuwait food company Americana, the majority of which is owned by Alabbar’s Gulf-based investment firm Adeptio, signed a memorandum of understanding (MoU) to establish a joint venture that will bring Xiamen-based Luckin Coffee chain to the Middle East and India.
This comes just two months after Emaar Properties signed an MoU with Beijing New Aeropolis Holdings (BNA) to jointly develop a business and tourism complex in what is set to be the largest airport in the world - Beijing Daxing International Airport - to integrate retail, entertainment, office, hotel hospitality, convention, sport, art and lifestyle functions in a one-stop solution.
So after years of speculating what a quiet Alabbar means, we now know the answer: it’s the quiet before the storm.
Amazon thought it could conquer this region – then Noon popped up. Uber thought it could conquer the region – now Didi has popped up. There is a pattern here, don’t you think?
And if we could read his mind right now, we wonder what his message to the Americans would be. Perhaps something along the lines of: “Watch your business, because we’re coming to you”.