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Coupon rivalry good for consumers

LivingSocial launches and gives Groupon a run for its money.

A second large US deal-of-the-day website is preparing to launch in the UAE - raising the question of how many coupons the market can take.

This month the industry giant Groupon started offering heavily discounted deals on meals, spa treatments and other goods and services in Abu Dhabi and Dubai. Now LivingSocial, Groupon's main rival in the US, is gearing up to launch in both cities.

The newcomer will also face competition from home-grown sites such as GoNabit and Cobone.

GoNabit's chief executive Dan Stuart said he welcomed the increased competition, which he felt would help increase the size of the market.

But would it also make it harder for his firm to secure the best deals? "We have seen other competition enter the market that has aggressively tried to win business from us," he said. "Despite that we have continued to win the highest-quality deals in the market.

"We have existing buyer and business relationships that have been nurtured over time. As long as we continue to look after these relationships then we will continue to be successful."

Groupon is the US market leader, credited with creating the daily deal model, which uses the power of group buying to give steep discounts.

Each offer is confirmed only when a certain number of people have clicked "buy".

Each customer is then sent a voucher for the restaurant, spa or other supplier.

Faisal Haq, Groupon's managing director in the Middle East, was equally sanguine about the rivalry.

"Competition is excellent, it always keeps you on your toes," he said when his site went live on March 1. "There are a lot of benefits for the consumer in this kind of market.

"Groupon is a phenomenon and Groupon clones are also a phenomenon which has followed the success of Groupon.

"We're looking forward to having our position of primacy in the market over here," he said.

He added that he was not concerned that rival companies would affect Groupon's ability to secure the most attractive deals.

The reaction of internet users in the UAE has been overwhelmingly positive. Vineetha Menon said on Twitter: "LivingSocial in Dubai. Can we have too many discount sites? Never. Bring on the deals!"

Nick Gonzalez tweeted: "Groupon and LivingSocial are really fighting over Dubai ... ads everywhere."

And Jo Akkawi said: "Oh my. LivingSocial advertising just hit networks across the region."

LivingSocial has set up separate websites for Abu Dhabi and Dubai, giving details of the services it plans to offer and inviting subscribers to register.

Groupon followed a similar process, inviting subscribers to sign up from January before going live with daily offers.

The company is advertising on other websites and sending promotional e-mails to prospective customers.

 

csimpson@thenational.ae

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