Group buying to widen shoppers' web

Group buying websites have raised the profile of online shopping in the Middle East are are predicted to grow sales further.

Last year heralded the arrival of several group buying websites in the UAE, offering discounts on a wide variety of products including food, holidays and pet grooming.

Experts and industry insiders say the growth of e-commerce has raised the profile of the overall market in the Middle East, with the sector forecast to expand dramatically this year.

Paul Kenny, the founder and chief executive of Cobone.com, which was launched in late 2010, expects the group buying market to double sales this year.

"In the overall e-commerce space, this year is going to big," he says. "Daily-deals websites have almost forced people to go online and buy. We are converting people online almost every day."

Cobone.com's sales grew 35 per cent last month on the previous month, and a new fashion area of the website has enjoyed user growth of 10 per cent a day since it went live, Mr Kenny said.

Owners of regular online shops say the arrival of sites such as Cobone, Groupon and LivingSocial in the Middle East do not pose a threat to their sales.

Sanjay Amarnani, the chief executive of the Dubai online sales portal AIDO.com, said group buying sites could help to boost the wider e-commerce industry. "I'd see it as a positive sign. It's not really competition," said Mr Amarnani, whose site sells DVDs, games and electronics.

"If there are more people using group buying sites, it means people are more comfortable doing things online."

Sana Toukan, the research manager for the Middle East at Euromonitor International, said the group buying industry was growing "exponentially".

Travel deals offered by such sites were a particularly strong area of growth, she said. "It's a big trend and it's growing exponentially, especially for travel."

Despite the excitement surrounding the group buying industry, it has not experienced an entirely smooth ride in the past 12 months.

Groupon UAE received a deluge of complaints on its Facebook page last month, with customers expressing annoyance over poor service and asserting that the website could not meet demand.

Competition is also high in the sector, with more sites popping up each month. Last week, a website called Marhabadeals.com was launched.

Although there are teething problems, there is little doubt that group buying is raising the profile for e-commerce in the region.

"As long as you have someone online, it does not matter how they got there," said Mr Kenny. "It's just good for the region."