This Facebook app makes giving out gifts smarter

The Life: A new Facebook app Just Gift It being launched from Dubai hopes to bring the trend of social gifting to the region, says Fabian von Lowenfeld, co-founder of Just Gift It company.

Fabian von Loewenfeld, right, says Just Gift has provided retailers with a new marketing and sales model. Jaime Puebla / The National

Fabian von Loewenfeld wanted a more social and mobile way of gifting than passing around the hat. So he decided to bring to the UAE a social gifting app that is already popular in Europe and North America.

The former branding and market research executive at Emirates NBD quit his job at the end of June and co-founded his company called Just Gift It, which launched yesterday.

Its core proposition? A Facebook application for smartphones that can send gift cards to friends on their birthdays, farewells and other occasions.

"We are providing retailers with a new marketing and sales model," says the 37-year-old German native.

The deep penetration of Facebook and smartphones in the UAE is an encouraging factor for sites such as Just Gift It, which rely on a combination of the internet and social media for their success.

But it's a case of wait and watch for the founders of the company as they try to replicate a model that is new to the Emirates marketplace.

"Social gifting on Facebook is relatively new globally, so this is new in the UAE as well," says Jonas Zelba, a senior research analyst at Frost & Sullivan, a consultancy in Dubai.

But the UAE market is "maturing for online transactions and many companies are looking to take advantage of this", he adds.

PayPal, for instance, is in the process of opening an UAE office to meet local demand and currently has a 5 per cent e-commerce market share in Middle East and North Africa, Mr Zelba says.

With the Just Gift It app, users can log in with Facebook, select a friend or family member and a gift, and have it delivered to the recipient's smartphone.

The recipient can then print out the gift card and redeem it, or simply take their mobile phone to the specific retailer.

Similar apps include Wrapp and Treater, both on Facebook, and Boomerang, which works with Gmail and Google Apps email.

Facebook is also trying to tap into the social gifting trend. Its first acquisition after its initial public offering in May was Karma, a US social gifting app. Four months later, it launched Facebook Gifts.

Although Just Gift It will be unique in the UAE, local market data is encouraging. Facebook has a user base of 45 million in the Middle East and North Africa region, with 22 million members accessing it through their smartphones, according to the company.

"We want to reach out to more customers ... and make ourselves more accessible to existing customers," says Saleh Al Shawa, the general manager of Al Jaber Optical, which has 35 locations in the UAE.

The company does not have an e-commerce platform yet, but has plans to enter the sector next year.

The Just Gift It app will give companies such as Mr Al Shawa's a foot into the e-commerce world.

The app is free, but Mr van Loewenfeld and his four partners expect to generate revenues through commission charges for retailers.

The fees will vary from sector to sector because some retailers have narrower profit margins.

Mr Loewenfeld and his four co-founders have invested about Dh500,000 (US$136,128) in their venture in the past six months. They expect to break even in the second year of business. The initial target audience for their app is the beauty and grooming sector and the venture has tied up with retailers such as Al Jaber Optical as well as NBar, a nail salon, 1847, a men's salon, JetSet, a grooming company, the online children's store Mumzworld, and the online lingerie store Nuit D'Art.

It plans to add a new retailer every second week.

One of the major challenges the app faces is that it is launching in an untested market with a diverse consumer preference.

"We will have to introduce enough flexibility in our model to allow us to grow," Mr van Loewenfeld says.

People in the United States who use such apps give one card a week, according to market research done by the Just Gift It team, who hope to drive similar volumes.

Another challenge could be cross-border legislation as the app team is already eyeing regional markets.

Currently, the team is in talks with big retailers such as Al Tayer and Al Shaya along with top hotels and malls to target mass consumers.

"Except financial products, we are offering the whole universe of retailers," Mr van Loewenfeld says.