Dubai: The local market for online discount coupons is going to heat up with the entry of the world's leading name — Groupon — in the category.
But local players say they are taking the foray very much in their stride.
Groupon's arrival further intensifies competition in a market that has experienced considerable growth over the last 12 months. GoNabit, the first group buying website in the Middle East and North Africa region, announced this week it had saved consumers close to $2 million (Dh7.3 million) in six cities since it began offering deals in Dubai last May.
Dan Stuart, CEO of GoNabit, said Groupon's arrival in the UAE was something that most people would not have expected around eight to ten months ago. "They have been looking to start up pretty much everywhere and now they have their sights set on the UAE market," he said.
"They are a large company with a lot of resources and I am sure they want to be very successful here. I hope Groupon operates to a high standard in terms of their relationship with both customers and merchants because that in turn will boost what is a very young industry."
Groupon.ae received 210,000 daily visits during the pre-launch phase. The local operation currently employs 15 people and is looking to add more.
Quota
A two-year-old start-up based in Chicago and operating in more than 500 markets, Groupon runs daily deals that a certain quota of users must purchase for anyone to take advantage of the offer.
"The international network of Groupon websites allows us to feature cross-border deals, and makes us the preferred partner for international businesses, who are looking for consistent and high quality brand association," said Faisal Haq, founder and managing director of Groupon M.E.
"We are not a one-off daily deal website. Groupon's model is an ideal and cost-effective part of a long term marketing strategy." The company's global success — it recently spurned a $6 billion (Dh22 billion) takeover offer from search giant Google — spawned hundreds of similar start-ups all over, including in the UAE.
Thousands of UAE residents have subscribed to one or more coupon websites to receive daily e-mails offering products or experiences with discounts of between 50 to 90 per cent.
Paul Kenny, founder and CEO of Cobone and part of the Jabbar Internet Group, said Groupon's coming to the UAE with a lot of international experience but are not necessarily a local brand. "The UAE is a highly localised market and Groupon will be going for some of the big clients with whom we already have long-standing arrangements," he said.
Cobone, which launched in the UAE last July, is pushing the site's Arabic content to make the portal accessible to both the local and expatriate population.
"We only work with the big brands, such as Jumeirah and Ferrari World, and more than 150,000 users have already signed up to our offers," Kenny said. "The market is moving fast and it will continue to move faster with the arrival of Groupon; it is up to us to stay ahead."
GoNabit — along with several other UAE-based coupon websites including Cobone and dealgobbler.com — offer residents of Dubai and Abu Dhabi opportunities to take advantage of deals ranging from restaurant meals to spa treatments to gym memberships.
Stuart says GoNabit will continue to focus on its interaction with customers and merchants rather than worry too much about the arrival of Groupon.
"The basic model of GoNabit is similar to Groupon but the product mix is very different," he said. "We have taken a core model and applied a local flavour."
The rise of online coupon sites began in the US, but the concept quickly spread across the globe. Sami Raffoul, general manager of Pan Arab Research Centre in Dubai, said coupon websites formed part of the total media mix in the UAE.
"Undoubtedly the whole Arab world is exposed to the latest techniques from marketing companies in Europe and the US. Coupon websites such as Groupon constitute part of the UAE's total symphony of media and they help to invigorate the region's marketing arena."
Shopping around
Raffoul says he is convinced there is room in the market for Groupon. "The evolution [of coupon websites] means more people are shopping around in search of a bargain," he said.
"Apart from showrooms and supermarkets, nothing is a fixed price anymore. There is a huge variety of deals and discounts to be had through a range of different products.
"These websites are different from the normal way of doing business."
e-commerce: Global movement
Groupon's launch in November 2008 led to a worldwide movement in e-commerce. The company says it uses principles of collective buying to bring millions of dollars in new revenues to local businesses while saving subscribers more than $1.8 billion (Dh6.6 billion).
This week, Groupon launched Gaopeng.com in China. The company's worldwide sales hit $760 million last year and it is aiming to top $1 billion this year.
