Dan Stuart has been compulsively checking his iPhone ever since he launched the online start-up GoNabit.com on Wednesday.
Internet coupon book launched to tap power of group buying
Dan Stuart has been compulsively checking his iPhone ever since he launched the online start-up GoNabit.com on Wednesday. Every so often he cries out: "We just sold another one." The sales he is watching so closely are vouchers for a meal at Burger House, a restaurant at Jumeirah Beach Residence, made available through his GoNabit website.
But GoNabit is not just about selling coupons - it is trying to introduce the concept of group buying, the latest online retailing craze, to a sceptical UAE audience. The GoNabit concept offers products or services at deeply discounted rates with a one or two-day deadline every weekday. Each offer must attract a certain number of customers before the time expires for the deal to be finalised. If not enough people sign up and the featured business has not covered its margins, those that have signed are given their money back.
The concept is already being used in the US and elsewhere. LivingSocial, a similar company to GoNabit, recently landed US$25 million (Dh91.8m) in venture funding for its group buying service, while GroupOn, another outfit, announced it raised a round of venture capital that valued the company at $1.35 billion. "A lot of small businesses here don't have very good websites or a way to take advantage of buzz marketing without investing through an ad agency," said Mr Stuart.
"Because it's performance-based, we just take a commission of the money transacted on a site. They're marketing a product without a marketing budget." Mr Stuart and his co-founder Sohrab Jahanbani have been developing the GoNabit service since March. They already have 22 deals scheduled over the next month, with daily e-mails going out to more than 2,500 people in Dubai and to a significant following on Facebook and Twitter.
Mr Stuart said he planned to open a similar service in Abu Dhabi by the end of next month, and other cities such as Beirut, Cairo and Kuwait by the end of the summer. Although the concept has been around for only two days, both of GoNabit's offers - Burger House and one for the Heavenly Beauty Salon and Spa - have easily crossed the minimum sales threshold. "It's not about deal volume; it's about relevance," Mr Jahanbani said. "We do a deal a day for five days a week. It's very much about a marketing engine connected by social media user base and we crank up exclusively to one business every day."
Mr Stuart and Mr Jahanbani are funding the start-up themselves but they expect to announce an agreement with the online job search website Bayt.com next month. GoNabit's future lies in its ability to attract the same amount of business over the next few months, especially during the summer doldrums. "We're trying to match businesses and customers together to give the people ability to save and discover places locally," said Mr Stuart.