Cyberspace showdown for deals websites Cobone and Groupon

Alexander Kappes, the chief executive of Groupon Middle East, says his site has had a strong start to the year and has 1.6 million subscribers. AP Photo

Competition is heating up among the biggest daily-deals websites in the region, as both Cobone and Groupon Middle East battle for discount-savvy customers.

Both websites now also profess to be the most popular in the UAE, claiming millions of email subscribers and thousands of customers logging on each day to buy discounted vouchers for restaurants, fashion, electronics and travel.

"I'm still very bullish about the business model," said Paul Kenny, the chief executive and founder of Cobone. "I think people trust us more than other sites. We are the only big local brand left."

Mr Kenny said that Cobone had a subscriber base of 1.5 million customers in the Middle East and that the website was handling traffic of 100,000 visits per day.

"Cobone.com is currently within the top 30 websites in the UAE and has seen consistent growth in traffic numbers," he said.

Cobone claims to have increased revenue by 50 per cent each month this year and to be the biggest player in the region.

But Alexander Kappes, the chief executive of Groupon Middle East, says his site has also had a strong start to the year and has 1.6 million subscribers.

"Groupon UAE has conquered the market with incredible daily offers on the best things to experience, see, eat and buy in the Emirates," he said. "Groupon has also emerged as the most popular group buying website in the UAE and has overtaken all competitors in website traffic and visits."

Groupon's figures suggest it has bounced back from a crisis early in the year over the number of complaints it received from customers.

The company, which is listed on the Nasdaq in New York, parted ways with two chief executives in the space of six months as it has tried gain a foothold in the local market.

Groupon announced robust global results yesterday, with money collected from vouchers up 103 per cent to US$1.35 billion (Dh4.95bn) in the first quarter compared with the same period last year.

Dan Stuart, the managing director in the Middle East at LivingSocial, another major player, is less forthcoming about figures than some of his peers.

"We have definitely seen strong month-on-month growth this year across all the countries we are in," he said. "Growth in purchasers is outpacing growth in our email subscribers."

From one deal, which was a stay at the Banyan Tree in Ras Al Khaimah, Mr Stuart said LivingSocial sold $1.2m worth of vouchers. "We tend to look at who's buying and how many are buying," he said.

No independently audited data is available to verify which daily-deals website is the most popular by email subscribers or is the highest revenue earner in the UAE.

About 42 per cent of internet users in the UAE shopped online last year, which was up from 33 per cent in 2010, according to a recent survey by MasterCard.

The survey found that Emirates Airline was the most popular online purchasing website for UAE respondents to the survey, followed by Cobone.

Mr Kenny said Cobone was becoming an online discount site, consistently offering deals on products rather than just one-off daily deals.

"There's now two real players in the region, which is Groupon and us, but we will be less compared to Groupon soon," he said.

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