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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 Sidra Tariq
The group buying model has spread rapidly around the world since Groupon was launched in 2008. It may have taken more than a year, but the Middle East also recognized the importance of these deal-of-the-day-websites; now there are estimated to be more than a dozen group buying websites in the region.
The first one to implement the model in the Middle East was GoNabit.com, which began offering deals in Dubai in May 2010. It has established a strong foothold in the market and now runs deals in four countries with plans to expand to Saudi Arabia and Egypt this year. Another Dubai-based group buying website that seems to be doing well is Cobone.com, which launched in August 2010 and is currently running deals in six countries.
These appear to be the two main players in the region right now, but as many of us may have heard, the latest addition to the list is set to be the pioneer of the model itself, Groupon.
News of Groupon arriving in the UAE has been doing the rounds for quite some time now. While a website (www.groupon.ae) is accessible, there hasn’t been an official announcement from the group buying model pioneer nor have any deals begun.
In late December, however, The National managed to confirm that the website (which many thought was a scam) was legitimate. The newspaper quoted a Groupon spokeswoman as saying: “The site…is up to collect subscribers; when we receive enough—several thousand—we we will begin offering daily deals. We hope to begin offering deals within the month.”
We are entering the month of February, but no deals have been featured on the website yet.
In establishing its Middle East presence, one would have thought that Groupon would acquire local group buying companies, like it did in Germany with CityDeal, in Malaysia with Groupsmore and in India with SoSasta.com. But early indications are that Groupon has decided to tread its own path in this region.
When news of Groupon turning down an alleged $6 billion acquisition bid by Google spread, Kipp asked Cobone and GoNabit founders what they would have done if such an opportunity knocked at their doors – from Groupon, for instance. Unsurprisingly, neither rejected the idea of a buyout completely.
Sohrab Jahanbani, co-founder and chief operating officer of GoNabit, said, “Our priority at GoNabit is to make sure that we have a viable business, and our focus is on our buyers, our merchants, our employees and our stakeholders. We are building a business that is viable and sustainable for the future and that’s a plan we are focused on. If along the way, someone comes and says ‘Hey, I really like what you’re doing and we’d like to be a part of that,’ then that sort of kicks off the whole process, doesn’t it?”
He said GoNabit would look at mutual points of interest and the vision both parties have. “Will we be stronger, better and more capable of achieving what we want to achieve through a partnership? We are a very young company. We have just gotten started and there is so much ahead of us. If people do take an interest in what we’re doing, we’ll always say, ‘How does that align with what we’re trying to achieve?’ If it doesn’t, then it doesn’t. And if it does, we can have a deal with them when an opportunity arises,” he added.
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