Can Vipdeals daily-deals site offer a better class of UAE discounts?

A new daily-deals website has launched in the UAE offering high-end products and services, even as one of the biggest players in the world leaves the Middle East.

A screen grab from the website.
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A new daily-deals website has launched in the UAE offering high-end products and services, even as one of the biggest players in the world leaves the Middle East., which soft-launched five weeks ago, aims to attract customers with a penchant for luxury and whose incomes exceed Dh20,000 (US$5,444) per month.

"We are targeting more of a niche market and we are a lot more careful with the deals that we put up," said Alex Gorodokin, the founder and managing director of Vipdeals.

"If we do hotels, it can only be five stars, flights won't include any budget airlines and then there are things that are special such as tables at nightclubs. We are looking at doing plastic surgery."

The website is launching in a competitive market, with more than 20 daily-deals websites plying their trade in the UAE.

Last week, LivingSocial, recognised as the second-biggest daily-deals company in the world, pulled out of the UAE, Egypt and Lebanon as it struggled to remain profitable.

Mr Gorodokin conceded the market was "extremely" competitive but said those websites offering a different product could be a success.

"The way we are addressing our audience is different because it's high-end," he said.

"What I see about the competition is that there are a lot of websites, which makes it a very competitive market but, on the other hand, this has changed the consumer behaviour. People now say: 'I want to go on holiday, let's check out the deals.'"

Vipdeals is offering a week's stay in a four-bedroom villa in the South of France for Dh43,750, a discount of 43 per cent.

It is also offering a hand-crafted pen for Dh1,750, at a 30 per cent discount and a tinted car windows service for Dh720, a 40 per cent discount.

"Whatever it is, it has to be up to a certain standard, top of the range or close to it," said Mr Gorodokin. "It's for people that make about Dh20,000 a month and above, so it's not such a niche market. It's appealing for very high-end people."

Funding for the website has all come from Mr Gorodokin and he is now employing two people full-time, as well as two more part-time staff.

He aims to make back his initial investment, which he would not disclose, in four to five months and begin paying himself a salary after 10 months.

Groupon and Cobone are the biggest sites now in the UAE, offering deals on products and services every day. Both websites claim to have more than 1.5 million email subscribers.

Alexander Kappes, the chief executive at Groupon Middle East, this month said the business was profitable. Other smaller sites, such as Joyoffer, also claim to be making money.

Previously working as a property consultant, Mr Gorodokin eventually believes his website can earn Dh300,000 in profit each month and has plans to expand to Qatar and Saudi Arabia.

"I think Groupon and Cobone are the leaders in the market and do come up with good deals," he said.

"I am trying to be extremely clear cut. I'm not putting 100 deals online, I'm putting 15 that are all real deals. The discount is real, the product is real, there's a certain quality."