With early investors backing out of Groupon and other sites re-evaluating their rapid expansions over the past two years, it's certainly not a good week to be in the local online coupon business.
LivingSocial, the online business that offers deals and discounts on a range of commercial products, is looking to exit the Middle East market, according to a report Sunday in Abu Dhabi daily newspaper The National.
In an email to employees, Eric Eichmann, the company’s president of international operations, explained that because LivingSocial was unable to move toward “sustained profitability” in the United Arab Emirates, Egypt and Lebanon, it is “looking at other options in those three countries.”
According to The National, Eichmann also wrote, “We have not made a final determination on our plans there, but we are likely to be exiting those markets either through a sale or suspension of those operations in the near future.”
LivingSocial is believed to be in discussion with potential buyers who of its current client bases in the UAE, Egypt and Lebanon.
The Washington, D.C. based company entered the Middle East last year after acquiring the site GoNabit but has since faced stiff competition in the daily deals market from Cobone and Groupon Middle East.
The National reported that Dan Stuart, chief executive of LivingSocial Middle East, would not comment on the company’s possible withdrawal from the region, but that he did indicate that all vouchers already purchased would remain valid.
He said, “Once someone buys a voucher on our website, the issuer of the voucher is the merchant and as the issuer of the voucher the merchant is responsible for delivering the service.
“Obviously, the voucher is always valid up until the point that it expires, and the expiry date is on the website and on the voucher too.”
(c)2012 The Daily Star (Beirut, Lebanon). Distributed by MCT Information Services.
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