By Stephen Kalin
It took nearly 24 hours after deadly football clashes in a Port Said stadium in February before thousands of mourning Egyptians amassed in Cairo’s Tahrir Square to protest police negligence. But Abdellatif Olama, CEO of a new internet-based consumer discount website, was able to observe the public’s negative reaction in real time. “On that day,” he says, “we were having record sales until the moment when it happened, and then the day ended sales with the same number that it had at 6 pm.”
At the helm of Dare’n’Deal, one of the four major daily deal websites in Egypt, Olama can track consumer spending habits closely. Egypt has witnessed healthy growth in this industry for several years, and the so-called ‘Facebook revolution’ in 2011 led to a more than 30% increase in the number of internet users, according to the Ministry for Communications and Information Technology. E-commerce companies wisely regard these new users as a huge growth potential.
Daily deal, or group buying, sites are currently one of the hottest segments in the industry. They were pioneered and popularized by Chicago-based Groupon, which was valued at $12.7 billion (LE 76.69 billion) when it went public last November, according to The Wall Street Journal.
The model is simple: These websites offer customers vouchers for highly discounted services from local merchants. The offer is advertised for a limited period and once a minimum number of consumers express interest in the deal, it becomes active and available to all. Consumers enjoy steep discounts, retailers get new customers and risk-free advertising, and the website takes a hefty commission.
Since its founding in late 2008, Groupon has reaped tremendous profits and expanded rapidly to cities across the US and around the world. Simultaneously, it has witnessed a plethora of copycat sites, chief among them being LivingSocial, which calls into question the sustainability of a business model that seemingly lacks any meaningful barriers to entry.
Fearing economic instability as a result of the Arab spring, Groupon’s global expansion has largely skipped over the Middle East. However, Living Social arrived in Egypt in mid-2011 on the heels of a several regional and domestic Groupon duplicates. more
It took nearly 24 hours after deadly football clashes in a Port Said stadium in February before thousands of mourning Egyptians amassed in Cairo’s Tahrir Square to protest police negligence. But Abdellatif Olama, CEO of a new internet-based consumer discount website, was able to observe the public’s negative reaction in real time. “On that day,” he says, “we were having record sales until the moment when it happened, and then the day ended sales with the same number that it had at 6 pm.”
At the helm of Dare’n’Deal, one of the four major daily deal websites in Egypt, Olama can track consumer spending habits closely. Egypt has witnessed healthy growth in this industry for several years, and the so-called ‘Facebook revolution’ in 2011 led to a more than 30% increase in the number of internet users, according to the Ministry for Communications and Information Technology. E-commerce companies wisely regard these new users as a huge growth potential.
Daily deal, or group buying, sites are currently one of the hottest segments in the industry. They were pioneered and popularized by Chicago-based Groupon, which was valued at $12.7 billion (LE 76.69 billion) when it went public last November, according to The Wall Street Journal.
The model is simple: These websites offer customers vouchers for highly discounted services from local merchants. The offer is advertised for a limited period and once a minimum number of consumers express interest in the deal, it becomes active and available to all. Consumers enjoy steep discounts, retailers get new customers and risk-free advertising, and the website takes a hefty commission.
Since its founding in late 2008, Groupon has reaped tremendous profits and expanded rapidly to cities across the US and around the world. Simultaneously, it has witnessed a plethora of copycat sites, chief among them being LivingSocial, which calls into question the sustainability of a business model that seemingly lacks any meaningful barriers to entry.
Fearing economic instability as a result of the Arab spring, Groupon’s global expansion has largely skipped over the Middle East. However, Living Social arrived in Egypt in mid-2011 on the heels of a several regional and domestic Groupon duplicates. more
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