DEALBREAKER? Tough times ahead for Middle East’s daily-deal websites

DEALBREAKER? Tough times ahead for Middle East’s daily-deal websites

As rumors of LivingSocial’s potential Middle East pull-out surface, Kipp wonders whether the time has come for daily deal websites alike in the region.

August 13, 2012 4:01 by Eva Fernandes

Over saturated and claustrophobically cluttered, Kipp has been predicting the death of the daily deal website in the UAE for some time now. And when we heard whispers of the potential Middle East pull-out from major US daily deal site LivingSocial, we couldn’t contain our fondness for doomsday prophesies without predicting the end is indeed near…well it is at least for one daily deal website in the Middle East.

It hasn’t even been that long for dear old Living Social. After all, the company bought local startup homegrown Gonabit just one year ago. At the time, LivingSocial was on something of an acquisition spree, it had most recently acquired a deal website called Ensogo from Thailand and the Philippines, DealKeren in Indonesia and it had also recently launched operations in the Netherlands.

Even though it acquired GoNabit at a time when there were over 20 group buying already competing for business, LivingSocial initially was doing pretty good. In fact, not ten days after LivingSocial acquired GoNabit did we hear rumors that the company was in talks with Barclays, JPMorgan Chase and Allen & Co to raise about $1 billion in an initial public offering. Nothing much came of the IPO and now one year later, The National reports the company is looking to sell its subscriber base in the UAE, Egypt and Lebanon,

Now with more than 20 group-buying websites around from Cobone, Moosavings, YallaBanana and BBM Baby, Nailthedeal, Cobonza, Cobonatti, Mox Deals and Makhsoom—Kipp isn’t too surprised with LivingSocial’s supposed plans. After all the daily deal market has long since been saturated in this part of the world. And though we have been predicting the overall crash and burn of the entire sector for some time now, we think if done well the daily deal website may still have a good few years in them.

What will be interesting to watch is how these sites reinvent themselves as they attempt to stay fresh and relevant. We have seen a genuine shift in the type of deals one of the leading daily deal websites in the UAE, Cobone.com, has offered. With a recently revamped website now online, Cobone has extended its variety of special deals to include, a special section for mothers, electronics, fashion and even a section for premium goods. But will this be enough? When a major player with an international presence like LivingSocial contemplates pulling out, you can’t help but worry for the health of the others…

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4 Comments

Tom on August 13, 2012 5:52 pm

Have you guys heard of this company called Groupon? Really, you talk about everyone except Groupon?
Marc on August 13, 2012 11:37 pm

Ha, weird Groupon was not mentioned! And DealGobbler was too. Pretty lame article if you ask me, I don’t think Cobonatti is supposed to be spelled this way. And so is Philipines (Philippines). Come on, spell check KippReport!
Sajjad on August 14, 2012 12:06 pm

The idea that a business offering 50%-80% off on website deals would introduce them to new potential customers always sounded outrageous, peculiarly very risky.
What sites such as Groupon and LivingSocial have done is create a new generation of “coupon clippers”. People will continue their routine of shopping, and see the place offering coupon as cheap or wait for more coupons from them. The retailers will have to beat convincingly the expectations for having those few returning full paying customers.
Wanting to save money on this recessionary global economy, for a while we too bought coupons; few times a month we went out we did by coupon. Looking for deals we bought some items that appeared cheap, later realizing quality of item was cheap too.
But by saving us a little bit of cash we were not getting any good value.
The retailers couldn’t deal with the large number of customers or their service was awful because they lose profit on each deal so they couldn’t be bothered.

In closing, you get what you pay for. And in the end, coupon sites will also be eradicated; they’re just the latest trend the UAE was actually late getting in on.
Michael Mullen on August 21, 2012 2:59 pm

Tried to call makhsoom today to complain about two crappy vendors and the office number remains unanswered! I think they’ve finally sunk…probably ran off with our money as well