Expatriates living in Dubai city have welcomed the entry of Groupon.com in UAE. It has become a part of their life to browse mail and to purchase products at discounts. Dubai is an expensive city and these discount deals help people buy luxury items at a discount. It has become a serious business in UAE. People across UAE look for bargains on such platforms. Reuters business report suggests that Groupon is valued at US$20 billion (Dh73.45bn). It is present in several countries. Groupon, which entered business this year has a lot of regional players to compete with such as DealGobbler, GoNabit ?and Cobone, or coupon in Arabic.
The financial model of these sites issimple. They try to increase the volume of sales by influencing more customers. Businesses offer discounts with the anticipation that a certain number of customers will go for such deals. The marketing effort is generally by word-of-mouth. The group-buying sites will in return receive a percentage of the sales they made. These platforms are generally used for increasing short-term business rather than going for repeat customers. The aim is not to make them loyal customers but to gain more new customers. The deals are more promotion-oriented and each business should see that they manage the volume of coupons and do not lose money as a result. Companies like Groupon or Cobone try to retain clients through the business. Cobone is a huge hit in UAE,?selling almost 8,000 to 10,000 coupons a week.
End of it, the customer wins by purchasing a product or service that would have been unaffordable for them.