Groupon stays mute on Middle East job cuts

Former CEO of Groupon Middle East Faisal Haq replaced by co-founder of LowCostDubai.com

Tags: Group buyingGroupon (http://www.groupon.ae )United Arab Emirates
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Groupon stays mute on Middle East job cuts Groupon has appointed a new CEO amidst rumours of job cuts in the company in the Middle East.
By  Claire Ferris-Lay Published  August 11, 2011

US daily deals website Groupon has stayed mute on rumours of job cuts at its Middle East operations, but confirmed it had appointed a new CEO.

The company has hired the co-founder of LowCostDubai.com, Ainsley Duncombe, to replace the former CEO of Groupon Middle East Faisal Haq, as competition between Gulf discount sites heats up.  

Duncombe refused to comment on speculation of widespread job cuts at the firm, which began operations in the Middle East in March.

Chicago-based Groupon did not respond to emails from Arabian Business. 

Groupon, the world's largest daily deals site, confirmed last week it was cutting underperforming staff at its Chinese joint venture Gaopeng, describing the move as part of its "growth process in most countries."

"As part of our normal process of establishing a high talent bar, we are optimising our Gaopeng sales staff and releasing several underperformers," a Groupon spokesman told Reuters.  

"This is a natural part of our growth in China, and was part of Groupon's growth process in most other countries."

Group buying websites that offer limited-life discounts on items ranging from spa treatments, to meals and hotel stays have mushroomed in the post-recession Middle East.

But competition has increased, squeezing price margins and forcing a number of deal websites, such as Wanamax, to close.

Groupon's biggest competitor, LivingSocial, in June acquired Dubai's GoNabit in a move that is expected to see the brand expand across the region and triple its number of staff.

Last month the Jordanian media company Jabbar Internet Group said it had taken full control of Dubai discount coupon website Cobone.com.

Dan Stuart, CEO and founder of GoNabit, told Arabian Business that only the strongest deal's sites are likely to survive. "I think if you look at the seven biggest, they are at the top and I think everyone else struggles," he said.

Paul Kenny, founder and CEO of Cobone, said in July he expected more regional mergers.

"I have no doubt that they'll be a lot more mergers, a lot more companies consolidating to grab more market share. There have been a lot of deal sites that haven't succeeded so far and that have pulled operations."

Regional market leader Cobone currently has a 58 percent share of the market compared to Groupon's 33 percent and GoNabit's nine percent, according to Kongregator, a website that monitors the group buying industry.

Groupon said in June month it hoped to raise up to $750m in an IPO, which could value the firm at as much as $15-20bn.

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