Group Hog: competition heats up in UAE’s group-buying scene

Group Hog: competition heats up in UAE’s group-buying scene

There’s an abundance of group-buying platforms in the Gulf right now, all originating from Dubai. But is there a real understanding of how they an capitalise on this latest trend?

June 5, 2011 4:48 by Precious de Leon

One of Kipp’s friends who shall remain unnamed due to potential embarrassment of hanging out with grumpy ol’ Kipp, just came back from a weekend getaway at an expensive hotel in Ras Al Khaimah.

The best thing about the getaway, said friend, was that he was able to treat himself and his wife to a weekend away from the kids at half the room rate. He got the voucher at one of the many mushrooming group buying sites in town.

And he’s not the only one getting on the bandwagon. From GoNabit and Cobone to the UAE version of Groupon, many people have indeed caught the group buying fever. We’re willing to bet you’ve got many friends have bought into this trend…Or even, dare Kipp say, you, dear reader, have bought a voucher or two from such sites.

In these days of penny pinching, why not treat yourself to a spa treatment at 30 percent off, right? And this summer, why not grab (or as GoNabit would like to say ‘nab’) that weekend getaway to Oman or that 5-night Thailand deal? (Don’t ask us what is Cobone’s version of the ‘nab’ is though…oh yes, Kipp went there.)

And just like any other trend, everyone is trying to cash in on it–even if it’s just the thinnest of relevance. Arabian Automobiles’ deal with Cobone to giveaway a 2011 Nissan Pathfinder at a 15 percent discount to the first four people, for example, isn’t exactly a group buying model. But making the discount available on a group buying site is indicative of the growing importance of these platforms as a tool to communicate to prospective clients.

Even if you take away the discounting aspect of the group-buying concept, brands also stand to win over new clients that use the vouchers to try brands and experiences they wouldn’t consider otherwise.

Aside from brands experimenting on these new channels–succcesfully or not (if you clicked the hyperlink above, you’d know that all four Nissan’s were bought at the discounted price), group buying platforms seem to also be growing in number as fast as Sean Combs AKA Puff Daddy AKA P Diddy, etc etc changes his name.

So while most of us are still struggling to find out the right way to say ‘Cobone’, the latest addition to the UAE group buying scene launches this week, YallaBanana.com. (For the record, Cobone is pronounced as ‘co-bon’ derived from the Arabic way of saying ‘coupon’ and not as some of you have snickering-ly said outloud: ‘co-boney’.)

Turret Media, organiser of annual foodie event Taste of Dubai, is behind YallaBanana.com, which reportedly has more than 300,000 members.

According to its organisers in an interview in Gulf News, the site is different because it is segmented into seven tabs: shopping, entertainment, food and drink, health and beauty, family, travel and tourism, and business.

This, according to Turret Digital GM David Westly, benefits the merchant as much as the members in that the former can insure promoting to a more receptive audience, while the audience would be able to tailor the kind of packages they receive.

“As the site develops, and the more deals we have and the more users buy them, so it will learn what kinds of deals you like,” Westly was quoted as saying.

So tabs?…hmm…Kipp appreciates that receiving waxing and salon vouchers is a bit of a nuisance to men who are mostly likely not interested in these vouchers. But isn’t there a possibility that selling this kind of fragmentation as a USP might be a bit of a longshot? Wouldn’t the client company, in this example a waxing salon, be losing the chance of encouraging indirect consumption? (ie a male YallaBanana.com member buying a female-oriented voucher for his wife/mother/sister).

Kipp is no commercial expert (and we do see this segmentation as a healthy welcome to the structure of group-buying) but it’s a group-buying site in the end There’s a place for more players in the market…and it’s definitely good for the audience as competition heats up. But shouldn’t the competition remain in the calibre of deals and packages a company can offer offer, rather than the ‘tabs’ you put them in.

And as for the site being able to dictate the kind of deals a member sees, according to their previous purchases, wouldn’t this take away from the new consumer reach aspect that the group buying platform so lovingly promotes as one of its strongest marketing points?

No matter. The bottomline is that many existing group-buyers like my unnamed friend will now have another site from which he can check out the latest deals.

Kipp wonders whether the addition of new players in this arena actually even increases the community of group-buyers at all…and whether there has been a comprehensive study into what kind of consumers are into group-buying. With so much competition out there, one of them ought to do something about it. Maybe a research company can offer a group-buying discount for the companies themselves.