Online portals offer businesses a risk-free way of drawing in clientele and the latter a new way to shop and save. Image Credit: Rex Features

Dubai: A slew of new discount online portals are vying for the attention of UAE residents when it comes to fine dining and holiday options.

"Consumers are certainly more cost-conscious, so you could say that the downturn has played a part," said Dan Stuart, CEO and co-founder of GoNabit.com, an online group-buying discount site.

"Our research showed a clear demand for online shopping within the UAE," he said. "Contrary to perception, the UAE's residents are already shopping online, but they shop at overseas websites. People want to discover new experiences. Both of these elements are important during any type of financial climate."

GoNabit.com became the first group-buying platform to launch in the UAE, and will shortly be followed by Cobone.com. "Group-buying is an age-old concept, popularised online in the US by a company called Groupon, which is now active in 50 cities throughout North America," said Stuart.

"We've followed a similar model, but adapted it to suit the regional market, such as providing the interface and deal communication in both English and Arabic, and localising payment methods."

Sales target

The concept of such social consumer sites is to offer heavily-discounted daily deals from local businesses which are then offered to its subscribers for a limited period of time. They use the power of group buying to negotiate some of the best available deals.

Buyers are able to access the site by subscribing. They then receive daily email updates, offering them a product or experience in their city with discounts of between 50 to 90 per cent.

Deals so far have ranged from beauty products to massages and dining experiences as well as outdoor adventures. Before they get to that point however, the subscribers must first ‘tip', which is the point at which the agreed number of purchasers opt into buying a deal.

Once this point is crossed, the deal goes live and any subscriber can purchase it. The deal only lasts for 24 hours or until it reaches its sales volume target.

"The elements of surprise and discovery keep people interested in the daily deal, which is emailed to them every morning," said Stuart. "Our deal mix is meant to appeal to a broad audience and spark new demand for experiences."

The portals offer businesses a risk-free way of drawing in clientele and the latter a new way to shop and save in their city. Already quite a few shoppers have signed on in the UAE.

"In a little over two months, we have attracted more than 16,000 registered subscribers in the UAE alone, sold over 3,000 deals or ‘nabits', and saved customers over a half a million dirhams in the process," said Stuart.

The decision to launch in April, just before summer hits the UAE and during a time when people start to retreat indoors, was deliberate.

"People don't really want to spend any more, but don't want to do any less," Stuart added. "We knew this would appeal to people choosing not to travel this summer. We knew the summer period would make our assured marketing proposition more appealing to merchants. Traditionally it's a time when sales tend to dip and marketing budgets are limited. Our group-buying model presented a risk-free customer creation engine to help businesses reach their summer sales targets."

Meanwhile, the soon-to-launch Cobone.com bases itself on a business model created, and tested, by partners in India, Brazil, Australia, Germany and Turkey.

"These partners have become million dollar powerhouses of on-line retail in their respective markets and Cobone.com has set out to follow their lead in this respect for the region," Paul Kenny, founder and CEO, told Gulf News.

While it will initially be available across the UAE, the promoter's intention is to move very quickly to all the major cities in the Middle East, North Africa and, possibly, even further a field. "Right now we're picking the cities as per the markets that are more vocal, and before the end of the year, we plan on being outside the UAE," said Kenny.

He also wants to push the Arabic content, thus making the portal accessible to both the local and expatriate population. "Five per cent of total users online are Arabs, but only one per cent is in Arabic," said Kenny. "We want to fill that gap with quality Arabic content."

While this business model is a magnet for bargain hunters, it also offers prospects for businesses, particularly small and medium businesses, to gain clientele and increase awareness. Businesses have to make the initial sacrifice of offering high discounts, but in return they create a social buzz, get guaranteed customers and win repeat customers.

‘Low-cost method'

"For merchants it's a simple, direct and low-cost method of getting their offers across to an ever-growing number of visitors to our site," said Ainsley Duncombe, one of the founders of Lowcostdubai.com. "We also have a Facebook page and send out a monthly e-blast which gets merchants advertising out to over 60,000 Dubai residents."

Lowcostdubai.com, which launched in April, was one of the first online portals that showcased discounts on offer around the UAE.

"The website came about from informal conversations between a small group of friends who had been in Dubai for some time," said Duncombe. "We came to the realisation that although there were many money saving offers in Dubai, we could never quite find the information we wanted, when we wanted it.

"We felt it would be great to have a consolidated place to keep all the latest special offers so they could be easily accessible to the Dubai community."