GoNabit storms Middle East market

Group buying company sees 50% to 80% growth month-on-month since inception in May 2010

Tags: E-commerceE-paymentGoNabit (www.GoNabit.com)JordanKuwaitLebanonOmanUnited Arab Emirates
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GoNabit storms Middle East market GoNabit founder and CEO Dan Stuart says his company is expanding into two new Middle East markets in the next few weeks.
By  Georgina Enzer Published  January 12, 2011

Group buying company GoNabit is looking to launch into two more countries and to take new office space to match growth, according to founder and CEO Dan Stuart.

"They are major markets in the region where we have seen very strong interest that has compelled us to go there. We are already sourcing deals, we will start to pre-market in these markets, and launch in the next few weeks," said Stuart. 

GoNabit is seeing between 50% and 80% growth month-on-month in all their markets and massive subscriber growth in their first market, the UAE.

GoNabit launched  in the UAE on 26th May, 2010, and since then, it has expanded into Kuwait, Jordan, Oman and Lebanon.

GoNabit is a new concept in the region, an online marketing service where potential customers get to try-out products and companies through purchasing vouchers online at vastly reduced rates.

"We are basically a marketing vehicle for primarily service-based businesses. We work with businesses to promote their services and basically create first time experiences. We do it in a way that it is performance-based marketing," Stuart told ITP.net.

The site posts new special offers each day, usually offering a considerable discount on a service. Site users must click to purchase the deal, although the deal is not valid until a set number of users, displayed on the site, have purchased the offer. Only once that threshold is reached, ‘the deal is on' and users are charged for, and receive their voucher via email. , GoNabit takes a percentage off for each voucher purchased, again, only once the deal threshold has been reached.

"We take a commission off of every voucher bought through our website, no vouchers bought, no commission taken. It is a fixed amount per voucher. It is nice for businesses, we coined the term assured marketing, it is assured in the way that before their promotion runs, businesses know their cost projections per customer, whether it is five, 55 or 555, and so it gives a lot of assurance and transparency for them, versus running some kind of advertisement through a different marketing vehicle and hoping people come to the business based on it and then working out how many people came," said Stuart.

GoNabit works primarily with  service-based local businesses such as salons, spas and restaurants as very few of these have websites and if they do, they don't have any kind of transaction ability or lead capture, says Stuart. GoNabit are currently working with 250 local businesses, although that number is growing.

"We fill in that gap in the ecosystem where we promote their business online and convert that interest, that buzz and make that jump into people coming through the door, we are the bridge in that gap," he added.

For Stuart, what encouraged him to set up this business was the massive amount of purchases the people from the UAE do online in overseas shops such as Amazon.com and that services like Shop and Ship by Aramex, where you get a PO Box and ship your online purchases to it, were being used in the UAE.

"Amazon.com for example gets a huge amount of traffic from the UAE, all these people that are virtually travelling to the other side of the planet to buy things online. Why? Because there is the exact same stuff here to buy, but they choose to buy it there and pay more, well no, of course not, it is because there are very few things for sale online in this part of the world, so people are going to those kind of reaches to buy things online. There is that kind of latent demand here, but not the opportunity, so we saw that," said Stuart.

The GoNabit CEO says that the variety of products available for purchase here in the UAE is minimal, although the local market is growing.

"I am not sure the total amount of money spent online is growing as much as more of it is being spent here than maybe was being spent overseas, or is maybe being spent on other things, because all you can really buy online in this part of the world, the UAE, is flowers, gift baskets," he said.

Stuart said that setting up the business in the UAE was difficult and more expensive then it would have been in other regions. The initial costs of setting up an online business in the UAE, particularly for entrepreneurs, means it is prohibitive for people selling physical products to cover the initial set-up costs. Also, people selling physical products may face challenges shipping across borders.

"It [the Middle East] is a very fragmented market. We are fortunate in that sense that we don't sell stuff, our product is a voucher through email which does not cross borders and you don't have to pay import taxes, so it is a lot easier for us to launch into a fragmented market that way," he said.

However, despite the challenges of setting up an online business in the region, Stuart says there is at least one benefit.

"The upside is that, if you are able to do it, it gives you great barriers to entry for other competitors and you know what they need to go through to achieve the same thing," he said.

Several competitors have started up in the region, since GoNabit began, but while Stuart does not mind the competition, his biggest worry is that those businesses will not maintain a good standard of service.

"Other people in our industry, I hope that they are doing a great job too to be honest, because if people don't, it reflects poorly on us. The industry is young enough that if someone has a bad experience with one company, it can pass the negative onto the whole industry," he said.

Part of GoNabit's core strategies is to ensure the highest levels of security and encryption on their online payment and account information sites.

"Any page that has personal information on it, be it your information pages, your account page, this type of thing has the highest level of certification we can get, the highest in the world. There is a company in the US called TRUSTe; they certify data usage by websites. We went and sought out their certification," said Stuart.

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