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ArabNet Cairo Conference Panel: Group Buying

By Wael Nabbout | November 9, 2011 | Section: Coverage |

Group Buying was one of the many topics tackled at the ArabNet Cairo Conference this year. The model had witnessed explosive growth in its first years but has recently come under question with Groupon’s IPO. To address the issues of the region’s group buying scene were local group buying executives Ossama El Batran, Co-founder and GM of DareNDeall, Abdullah Assal, CEO of Offerna, and Dan Stuart, Managing Director of Living Social, Middle East.

Both Dan and Osama started by emphasizing the importance of deal structuring, citing that when merchants dictated what they thought was the best structure for the deal; things took a turn for the worse as they didn’t have a clear understanding of the model at hand. “The deal has to work for all 3 parties: the business, the consumers and us” explained Dan.

Osama pointed out that activities, food & beverage, and travel deals worked best, he also talked about the difficulty they face figuring out consumer behavior in Egypt, saying that users for example behaved differently in summer than in winter.

Abdullah on his part remarked that the success or failure of deals is not necessarily related to the sale, “non successful deals are not necessarily ones that don’t sell,” but rather when a customer has a bad experience with the product or service, “the highest ROI is word of mouth” he concluded.

The panelists also stressed the fact that the Egyptian e-market is still in its infancy with only 2% of Egyptians having ever bought online. Group buying solves 2 of the 3 issues that impede the progress of e-commerce according to Abdullah. First Group buying offers users real value in the form of huge discounts; second delivery is extremely simple with coupons delivered via email, payment however remains an issue to be solved.

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