Great Bargains at Daily-Deal Websites

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Coupon selling websites have made it possible for the middle class to get experiences otherwise not easily accessible through modern means of marketing and social media.

The sole purpose of social media is to provide users to be able to connect with each other and therefore this does not necessarily apply to the average user, it applies to businesses as an identity as well. One of the best use of social media and business engagement is the business model for coupon based social media websites.

Top business gurus call it group buying. The website that started it all and is a pioneer in its concept is Groupon. Today it has a reach of over 565 cities. Although the first website to introduce digital coupons globally was Groupon, it is not the first and the biggest group buying website in the Gulf. The Gulf market for group buying websites comprises of Cobone, GoNabit, NailtheDeal, Groupon.AE and LivingSocial.

While Groupon.AE and LivingSocial are the pioneers and offer their services in over several continents, the local brands Cobone, GoNabit And NailtheDeal offer their sites in Arabic as well.

An Introduction

In the Gulf alone Groupon clones have gained tremendous success and shoppers in the UAE have many options to choose from.

Dan Stuart, CEO of GoNabit, defines group buying as the most efficient form of performance-based marketing for brands and businesses. It is a more cost effective method unlike old-school marketing channels and not all group buying sites are created equally, and the main difference lies in how the site creates brand positive promotions.”

The way these websites use social media is by regular mails to members and Nabbers, which contain the deals.

The Players

The industry is more geared towards numbers, however number creativity seems to be the game played by all, so we let the sites do the talking. Alexa online statistics report that the largest group buying site in the Gulf is Cobone. Today it is the market leader and it has set many records in E-Commerce.

Cobone

The name is a play on words. Egyptians call the word coupon cobone, that is why we kept the name, said Paul Kenny, founder and CEO of Cobone. It is the only group-buying site that offers five different payment methods which includes the possibility to pay on delivery and some payment cards. When Cobone started Cobone found that people were reluctant to pay online. Initially they would pay by cash and then move to credit payments. “We are the only group buying site that offers prepaid cards so that youngsters can also pay if they want to”, said Kenny. Cobones ongoing success is due to their promise of a deal a day. Cobone is backed by the same company that owns SOUQ.com and OneCard prepaid cards called Jabbar Internet Group. Cobone has become the standard and set many records.

GoNabit

The next big player is GoNabit. Actually written as GoNab!t was the first social media based coupon site to be established in the Gulf and the first Arabic group buying site globally. Their business model is a mix of social media and e-commerce. As per Dan Stuart, GoNabit wanted to contribute to the growth of e-commerce in the region by supporting e-commerce in the Gulf and overseas by developing it, supporting it, speaking about it, innovating around it, and promoting it. According to Stuart, GoNabit has followed the model of global leaders and do not offer cash on delivery, and that is because of their long running relationship with Visa. Before GoNabit, the multitude of his success include Chief Possibility Officer at Bayt.com

Groupon

Groupon.AE comes in at third place, with its rich international experience. Although, they do not offer an Arabic portal, their global reputation extends to the Gulf region as well. They are the only Group buying site that offers mobile applications on Google Android, Blackberry and Apple iOS platforms and their Gulf deals are local versions are under development.

LivingSocial

LivingSocial is the next big name that needs no introduction. LivingSocial gained its popularity through its Facebook application and later developed into a huge group-buying website on its own. LivingSocial brought its deals to the Dubai. Unfortunately for LivingSocial fans it is restricted to just the mailing list.

NailtheDeal

NailtheDeal is the latest in the list of group buying offering in the Gulf. Currently it only offers deals within UAE and it is starting out. Like Cobone it offers 5 payment methods as well. While offering Cash on delivery, it offers users who Nail it the possibility to make payments via moneybookers.com. New users who join the site get three Dirhams for joining.

Honestly, all these site have the same format, so it is just a matter of who offers the better deal, said Tarek Refaat a Masters student from Egypt.

How They Work

There are two principals to new age marketing technique that was felt my the local giants. The UAE for example has a countless number of business but not everyone has the funds to do it and we are going to get people to your door. We guarantee the business a fixed number of customers for the deal to go liver then share the revenue, said Kenny. For users it is either a race to buy the deal before the time on it runs out or the total number of deals sold has been reached. Companies love this idea as the group buying site will then manage and bring in new customers that will complete their capacity.

Niche Marketing

The main reason why the local players are way ahead of the international competition is their understanding of the market.The local brands decided to target the niche market of Arabic content and they are have developed what is know as cultural intelligence.

Part of the reason why the local competition is ahead of the international group buying sites is the ability to pay in terms of cash over credit and the availability of an Arabic portal. 60 percent of the users on Cobone are women (and children) and 45 percent of Cobone users prefer the Arabic portal. Both GoNabit and Cobone have also pioneered travel deals through our Getaways channel. Cobone has a separate section for travel vertical called destinations that offers the best in travel packages.

The Figures

The most expensive deal sold on Cobone was when they sold four 2011 Nissan Path Finders with a discounted price of 94 thousand dirhams (discounted 17 thousand). Cobone holds the record in the Middle East for the most selling E-commerce site a ‘Vapiano Super Deal’ “(costing just 10 Dirhams) sold at a constant rate of one every two seconds.

GoNabit though trying to catch up to Cobone has had major success as well. We sold out for a detox retreat to Thailand priced at 3200 dirhams. We’ve also have the two biggest days in regional E-commerce when we sold over $360,000 of Banyan Tree villa nights, and over $220,000 of Ferrari World passes, reported Stuart.

Future Challenges

The market for group based sites is a very lucrative one in the Middle East. Still there are substitutes to these websites. DreamDay.AE and TimeOut Deals. They are not necessarily limited to just online marketing, they use the aid of major retailers like Virgin Mega Store and Jashan Mall stores to promote their discounted offering. DreamDays has a very specific market targeted towards honeymooners and Adrenaline enthusiasts. Kenny states, we will match anything they offer with a cheaper price.

Although the growth is there, Google Offers just started and Facebook Deals have just been revealed. Once they lift off they might pose some competition to the local players given the sheer size of their users. However, Kenny of Cobone believes he is up to any future challenge.

According to Kevin Duffy article on Duffy Agency published on March 3, 2011, It seems that group buying sites could benefit from location-based services more than they already do. Imagine checking in at a downtown store and finding out that either that store or one close to it is offering a group buying deal.

 

 

 

 

 

 

 

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