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Cobone: Trust can be lost with one click


The UAE government, after many shady deals done by e-commerce businesses, has decided to intervene and set regulations. Kipp speaks to Paul Kenny, founder of to get his view on the matter.

July 22, 2012 11:48 by

There is no doubt that the e-commerce and ‘daily deal’ sites have become an enormous explosion in the UAE and the Middle East region. In your own opinion what is it? Is it the increase in Internet use, a form of laziness or just a hunger for a good bargain?

There has been an incredible increase of awareness of the eCommerce industry in the past 2 years, specifically within this region, which is attributed to a number of factors. I have found a dramatic shift in user behavior that has been dominantly driven by the major shopping malls, where now e-commerce customers find it much easier and more private to shop from home. It wasn’t long ago that many online retailers in the region didn’t offer the choices and good prices you would find in shopping malls but that shift has begun. sells over 100,000 units every month now, which shows that the online market is really beginning to take off.

 Is this calling for government regulation a huge deal breaker? Do you see it having a positive or negative effect?

Right now, the Internet industry here is relatively new in the grand scheme of things and when it comes to regulation this can only be a positive thing. I have found that regulation will not only protect businesses that have invested large sums of money into the region to build big brands but it protects the customers as well. I would personally welcome regulation but it is important that the government takes a bottom up approach and listens to the businesses in order to guarantee that the UAE is seen as a hub for Internet businesses into the future and not a country that hinders growth.

Do you see the government regulation as being the calling of the population, the government or the businesses themselves? And why has it taken this long for the government to concoct a regulation draft?

I see it just as a matter of time. The Internet industry here has only really taken off in the past two years with the advent of sites like Cobone and Souq and now that these sites are large in their own right it was time to create regulations that cover both the business and the customer. Earlier, the volume of transactions may not of been enough to grab the attention of the government and from an attention point of view would not have been a top priority.

 Groupon seems to be raising a lot of eyebrows, it’s stock IPO has hit its lowest and Living Social has begun selling merchandise. It seems that the word ‘survive’ is being used a lot. What is your take on this?

I have noticed that to have an effect against our international competitors for sometime here, as understanding the local culture is critical to the success of any business here in the region. Cobone has taken a very different approach to business here and has successfully adapted to local markets all while servicing its customers and business partners in a win-win relationship. Our focus has been on long term sustainability, not quick wins and so far that has worked extremely well as Cobone has been dominated for 18 months in the market. This just goes to show you that local brands can often trump the larger international players.

Do you think ‘cut throat’ competition needs to exist between these companies including or will this new regulation in fact set a limit between them so that it is reduced?

No matter what line of business you are in there is always competition, and to be honest, it ultimately keeps any business owner on their toes. What this means is that we will try harder so that our business partners and customers will always get the best products and Cobone will continue to evolve and innovate as it has done so since day one. I look at the regulation as a protection of Cobone from many of the companies that are starting up every other week in the same space which are not treating their customer’s right.

Often, our partners believe that we are a small operation when in fact we today have over 120 employees in 7 regional offices, which shows the level of investment we have made into building one of the biggest eCommerce companies in the region.

 Cobone has had what seems to be a quick journey to recognition. I know you may not want to reveal your secrets to everyone but is there a specific method of differentiating yourself or is it trial and error?

When starting out I had a vision of building the largest eCommerce business in the MENA region. This isn’t achieved in a day, a month or even a few years so we had to put in place a number of elements from day one that would help me and my team get to this goal. Building a business isn’t easy but it was great recognition when Mastercard released a survey that Cobone is the second most popular e-commerce website behind Emirates in the UAE; so that proved to me that we are on the right track.

With the e-commerce industry in the region, is trust no longer a factor? Do people blindly hand over their account details or do you still feel a barrier with customers?

No matter which region you operate in trust can be lost with one click when it comes to the Internet. This is especially stronger in the Middle East. Trust is critical to the success of Cobone where to day we receive over 1,000 phone calls a day to our customer support team and we welcome our customers and business partners to visit our HQ in Dubai Internet City whenever they wish. Effort is necessary to create trust.

Building trust isn’t an easy thing but sustaining that trust is even harder and Cobone is still working on both and is a key focus for us into the future.

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  1. chaz on July 23, 2012 5:53 am

    I think they have reinvented their site and offerings very well.
    Not sure where Living Social has gone to now.

    Just one question I can’t find an answer to: why Cobone?
    What does it mean?

  2. Eva Fernandes on July 23, 2012 12:02 pm

    Hi Chaz, to answer both your questions, Living Social has recently expanded and opened a branch in the US and Cobone is basically the English word coupon but said in Arabic.

  3. sandy on August 9, 2012 4:02 pm

    Hi, What are the regulations expected from the UAE Government? Is there a link to an article on the same?


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