The Daily Deal Dilemma
Even if you forget about the 20 other daily deal websites active in the Emirates, does launching a luxury daily deal website make good business sense asks Kipp.
August 27, 2012 5:36 by Eva Fernandes
Just when you think the UAE daily deals market is saturated—there launches another one. Despite LivingSocial pulling the plug on its Middle East operations just last week, The National reports of the new launch of yet another daily deals website. Are you ready for it? VIPdeals.com is the latest site to jump on the bandwagon with a soft launch not five weeks ago. As its name suggests the website offers daily deals on premium goods.
Alex Gorodokin, the founder and managing director of VIPdeals.com says: “We are targeting more of a niche market and we are a lot more careful with the deals that we put up. If we do hotels, it can only be five stars, flights won’t include any budget airlines and then there are things that are special such as tables at nightclubs. We are looking at doing plastic surgery.”
Now, even if you forget about the 20 other daily deal websites active in the Emirates, does launching a luxury daily deal website make good business sense? After all, most daily deal websites currently have a special ‘premium’ page which offer similar products—a quick visit to such sites will prove that premium pages are far less popular as the other offerings. Then again, perhaps if marketed and positioned differently VIPdeals.com could be more successful than Cobone Premium. Kipp is divided.
On one hand there is the issue of practicality. If the target audience has a disposable income of Dh20,000 or more, how likely is it said person will be scouting the internet for a discount for the next luxury seven star hotel holiday they are booking? If you were going to blow off Dh5,000 on a shiny new tie clip, something tells us this person won’t be too tight fisted.
On the other hand, consider the reputation of a high-end brand which strikes a deal with a site like VIPdeals.com. After all luxury daily deals is a bit of an oxymoron, isn’t it? Sure, you get exposure on the website-but would a luxury brand like Porsche or Mont Blanc ever want to associate themselves with discounts and special sales? Not only is offering a subsidised rate harmful to a brand’s image but it also casts the quality of its products in a harmful light.
Yet, there is something to say about the real want for quality deals and reputable offering on daily deal website. Even though the daily deal market is oversupplied, a good majority of the sites are nothing short of questionable. We wouldn’t buy from the lesser known daily deal site, no matter how great the deal maybe. After all, over the past year there have been cases of customers complaining about a daily deal website pushing a less-than-reputable merchant or offering substandard goods. If a company is able to establish themselves as the source of nothing less than quality daily deals, then it has a higher chance of success. Then again, such an image tends to be the result of a flawless reputation built and maintained over a period of time more than marketing and branding. Either way, Kipp is very interested to see how VIPdeals.com will fare and we wish them the best of luck. They sure will need it!