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Collective power

Collective power

Group buying has taken off here in the Middle East, but can the daddy of them all, US-based Groupon, successfully enter the market? If so, what will established players make of it?

January 31, 2011 12:53 by

Paul Kenny, CEO of Cobone, didn’t shoot down the idea either. “I think it would be very exciting to hear if someone is trying to acquire [Cobone]. Who wouldn’t want to sell their company? But right now, we are [only a few months] in and I don’t want to let go so early.”

“However, I think it is really exciting for the model in general,” he added. “It shows there is interest in the model, because what I see is, Groupon is obviously massive in the US, but it’s very hard to launch in another country without local knowledge, and that is what we bring and that’s our value: that local knowledge is very different. You can’t just copy what they do here.”

Groupon may not have the local knowledge initially, but it has more than two years experience in running the model in the US and around the world. Once it acquires the local edge, it may prove to be big competition for the regional ‘clones’ (as some like to call them). But do the current deal-of-the-day websites feel threatened by Groupon’s entry into the Middle East market?

“Groupon’s imminent arrival in the region signals the developing nature of the e-commerce market out here,” said Jahanbani in a recent interview. “As the first group buying website in the Middle East, GoNabit has pioneered the business model in this region and invested a lot of time educating both consumers and merchants about the benefits of group buying. We welcome other group buying websites who adhere to the same customer service, security and data protection standards that we do.”

Cobone may not have been a pioneer in the region, but its CEO is also confident that it will stand firm even if the group buying international giant starts offering deals here. “It is very exciting to see new entrants to the market as now has 15 competitors across the region,” said Kenny.

“Groupon will bring a wealth of intelligence, but I believe local knowledge, a dual language site,’s cash plus credit card payment options and our existing relationship with businesses throughout the region will be a huge value add for and will ensure we stay competitive in the market.”

So existing group-buying websites are confident that they are here to stay, but a question on many people’s mind is: “Is there really room for more?” From a market perspective, the plate is probably full. But looking at it from a consumer’s perspective, Kipp thinks more is merrier, because at the end of the day, it’s the deals that matter. So when Cobone offers a 50 percent discount on a massage treatment, GoNabit a 50 percent discount on a restaurant meal, and Groupon a 50 percent discount on a paragliding session, we win three ways.

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