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Wed 10 Aug 2011 11:50 AM

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Groupon stays mute on Middle East job cuts

Daily deals website admits management shake-up at Middle East offices

Groupon stays mute on Middle East job cuts
Groupon began operations in the Middle East in March

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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James 9 years ago

Was Ainsley actually a co-founder of lowcostdubai - dont think he was!!! Also if there are job cuts, does this mean they are ready to enter the market to buy another site - would make sense and the one that springs to mind is cobone - will put huge pressure on the likes of gonabit / living social and plus would give them 80% of the market share.

Markus 9 years ago

I just can't comprehend what the corporate world has boiled down to, cut-throat anti- society practices and policies, blaming employees as under-performers when in fact the leadership itself is underperforming - it's their way of justifying their failures at the top from a business model perspective. What happened to investing in your employees and supporting them in times of financial difficulty. People should consider who they do business with and pay attention to the practices of the corporate world. They are partially responsible for the economic collapse that is besetting the world.