Paul Kenny is the Founder and Chief Executive Officer of Cobone.com, an e-commerce website founded in late 2010.
Cobone.com is the largest daily deals company in the Middle East and North Africa (MENA) region in terms of revenue and also leads in many other verticals like electronics, travel, mums and kids, fashion etc.
Paul is a proven business leader with hands on experience in building great Internet companies and is also recognised as a thought leader in digital space. He is also a start-up fund ambassador for Enterprise Ireland, a mentor at Seedstartup, co-founder of the Irish Business Network, a part time lecturer at the Digital Marketing Institute Middle East and a mentor and adviser to numerous companies around the world. Arabian Gazette’s team sat down with one of the youngest CEOs in the Middle East to find out more about his business model and the raging popularity of daily deals and group buying.
Please briefly introduce yourself and your brainchild, Cobone.
My name is Paul Kenny and I’m a 27 year old Irish entrepreneur who has lived in the Middle East for almost 5 years. Before this I worked for some of the most recognised companies in the region including Jumeirah Group and Emirates as a consultant. Cobone.com was launched in August 2010 and has been the fastest-growing e-commerce site in the MENA region ever since. It started to bring businesses together with thousands of new customers every day and focuses on one time deals that are not easily available.
For example, we have run promotions with discounts on a brunch in Jumeirah, or a deal on a Nissan Pathfinder, even discounted iPad 3s. It is free to sign up and every day you receive an email with the best deals covering Fashion, Activities, Food, Electronics, Home, Families, Luxury, Travel and Health and Beauty.
Why in your opinion is Cobone better than all its rivals put together, including Groupon?
Cobone has become the number one group buying website in MENA for a number of reasons. Today, Cobone is the only local entity left in the region that truly understands local culture and the way customers like to pay. For example, Cobone offers the most payment methods in the region including credit card, various prepaid cards and even cash on delivery. We have also made sure to incorporate Arabic language into our site, being the first to offer deals in both Arabic and English in the region.
Furthermore and most critically, we consistently offer the best deals from our partners. You will regularly see top brands on Cobone including Apple, Jumeirah, Ski Dubai and many more. All of these combined ensures that Cobone has become the most trusted brand for group buying and we currently command 60% of the MENA market share.
Cobone is an easier way of buying products and living up great experiences that would normally not be possible for many people. ‘It’s fun’ as you put it. However, critics say it is a giant ponzi scheme. Please give our readers 4 reasons that explain it is not a ponzi scheme.
- Cobone offers businesses a risk-free method and guaranteed return from marketing. It is a new way of marketing that brings 1000’s of new customers to businesses all over the Middle East
- It gives our customers new experiences every day that they wouldn’t normally do and helps people explore their city
- The discounts are real and you cannot get these prices in the market
- It is safe and secure way of enjoying your city in a different way
Some businesses we’ve spoken to say customer group buying websites like Cobone and others offer are “extremely price conscious” and “want to make sure that they get a lot more than what they pay for”. Are you not concerned that businesses are becoming commodities because of these deals?
Cobone is a new way of marketing that is changing the way businesses can attract new customers. The customers we have found are not always looking for price sensitive offers. Often we find that our customers will spend more than what is on the bill and will return to the business if the service is of high quality.
Cobone is giving businesses the opportunity to showcase their service or product to the MENA region and our data shows that in the long run, these businesses generate a significant uplift in overall revenue from these campaigns.
Now that so many companies have jumped into the fray, how is Cobone trying to keep itself unique? What separates Cobone from the rest of the lot?
Cobone.com has always been the leading group buying site due to the speed at which it offers new products. Cobone was the first to launch in Arabic, the variable payment methods and now our mobile application is another key differentiator. To date, our mobile application, which is available to download for free for all Android and Apple devices, has passed the 40,000 download mark. We have also been the first to offer dedicated areas on the site for women, fashion, electronics, travel, mums and kids and products. Cobone showcases over 1000 deals every month on the best things to do and see in every city and continues to show it is leading the pack.
Many pundits suggest group buying websites are doing well as economies around the world are in tatters (technically under recession or some with single-digit growth rate). If economies were to improve and people’s purchasing power to rise, how do you think Cobone’s business model would adapt to that?
I believe that no matter what the climate is, businesses will still market their product and consumers will still be looking to explore their city with new and exciting deals. The business model was launched at a perfect time. However, it has now become a key component of many people’s lives so I would expect it to continue to grow aggressively as markets rebound.
Our investigations have revealed that many deal websites offer prices for something which has the same market value and pretend as if they’re selling it for less (giving a massive discount) which is tantamount to misleading. What is your take on this? How different are Cobone’s deals?
Cobone.com guarantees prices by checking the market before running any promotion. It is critical to ensure we gain trust by offering the best prices consistently in the market. For example, Cobone.com was the first website in the MENA region to sell the iPad3 and it was by far the best price available. So much so that we sold over 300 of them in 24 hours!
Economics tells us that every worthy product has its own value. How can a business sell something below market price and possibly at a loss, if not for their sole objective is to get some marketing publicity through reputed sites like Cobone ?
What is unique about Cobone is its ability to generate significant revenue and people through the door, unlike more traditional ways of marketing. I look at the business model as a guaranteed way of getting returns. Instead of paying a significant lump sum for a billboard, or radio advert and the business has no idea what they generate from it in return. Cobone is a risk-free way of getting exposure for your business and we actually pay you in return. It is a new and exciting way of marketing that guarantees results.
Loyalty is one important factor for sustainability in business. What measures Cobone takes to make every customer a loyal customer?
When working with our partners we spend significant time with them and make efforts to ensure they treat our customers very well. When a customer has a great experience, we have seen that they will share it with many friends. Giving a great experience to our customers is one of the key things we tell our partners. Loyalty will come from this and we have seen that many of our clients have gained a very loyal audience from running Cobone deals.
What is Cobone’s repeat-customer rate for both businesses and users?
Over 85% of our partners repeat to run another deal which shows that Cobone offers consistently the best value and service.
What is Cobone’s current transaction volume?
Cobone has sold over 720,000 Cobone’s and saved our customers over $40 million.
You are a believer in evolution of business and have spearheaded Cobone to evolve e.g. by starting verticals like Fashion and Electronics. How are these initiatives doing? What more verticals will we see in near future?
Cobone has been built on innovation and this has helped us become the leader at what we do. We plan on launching many new verticals in the future; I cannot disclose them right now but please stay tuned!
Recently, Cobone expanded into Saudi Arabia and Egypt. How is Cobone faring in these countries? What is the transaction volume there? Which other countries are you targeting soon?
Cobone plans on being in every major city and country in the MENA region and has a very exciting roll out plan. Egypt and Saudi Arabia continue to grow very well and we are very excited about both markets.
How is social media helping Cobone get more business?
To date, Cobone has over 500,000 followers on social media channels and this is growing extremely fast. We love the fact that we can communicate to our fans directly through these channels and we continue to see huge engagement. Our fans love the brand and we pride ourself on being the only local company doing what we do.
What is your prediction about the group buying websites’ landscape in the next 3-5 years?
I expect group buying to continue to evolve over the coming few years and you will see some very exciting developments from Cobone. Mobile will be a key component of the entire landscape as smart phone usage continues to grow in the Middle East. I am very excited about what the future holds!