Why Cashback Will Never Be Passé For Indian Users
If there’s one thing the past year has taught us, it’s that going online is the only way forward. We’ve all heard about the ‘new normal’ and the whole world going digital. From schools and offices, to governance and shopping for our daily needs, we have all lived our entire lives online this past year. Thanks to this rampant digitization, online shopping and the concept of e-commerce are being widely adopted; and Cashback is the Goliath of online shopping. As economies around the world went digital in the last couple of decades, the idea of Cashback websites started gaining traction.
Around 2011, my husband and I were booking our honeymoon tickets. At that time, we used to work in the UK. Like all online shoppers, we were trying to find the best deal on our flight bookings. That is when we discovered a few sites that were giving Cashback. Using one such Cashback website, we managed to save a great deal on our ticket bookings. We instantly fell in love with the idea of saving more on shopping online. After conducting a thorough research, we launched our first Cashback business, Pouring Pounds. It was a huge success in the UK, almost instantly. The popularity of Pouring Pounds encouraged us to bring our Cashback business to India in 2013.
The growth of the Cashback sector is directly proportional to India’s rapidly growing e-commerce industry. By 2024, Indian e-commerce is set to grow by over 84%, to a whopping USD 111 trillion market. This upward trend is set to continue, and e-commerce is believed to pave the path for India to become the second-largest economy in the world by 2030.
Speaking of growth, 2020 has been the biggest year for us since we launched. We almost doubled our business in this past year, as Indians became more used to buying online and saving in the process. Cashback is here to stay and flourish. India has always been a country that heavily relies on savings and we are highly optimistic about the future of this industry.
While average disposable income of Indian households has increased over the last few years, shoppers haven’t stopped hunting for deals and Cashback before going ahead with the purchase, and the cashback sites gives them easy access to that.
Users can find the best deals, coupons, and discounts on the same platform. And on top of that, they get extra Cashback and Rewards on their orders. This is real money that they can transfer to their bank accounts, and this is what sets us apart. I still remember, right after our meeting with Ratan Tata in 2016, I asked him for his thoughts on our business idea. He told us, “In a country that loves to save money, you’re giving free money. What’s not to love?”.
Virtual Is The Way Forward
The country is undergoing big changes with respect to the mode of transactions. The e-commerce industry is actively advocating digital transactions with the inclusion of digital wallets and UPI. UPI has seen almost 91% growth in number of users and transactions over the last year. With excellent advocacy for digital transactions, Cashback will serve as the perfect incentive to bring about this shift, and cashback sites are taking several initiatives to ensure this happens.
Diving into assisted e-commerce now, we aim to bring a completely new group of users from Tier 3 cities and beyond to the online shopping world. Here, we are targeting people who have heard of online shopping but don’t know how to use these e-commerce websites. We are doing this by reaching out to small Kirana stores, cyber cafes, mobile recharge centres etc., and empowering their owners to earn Cashback on every online order they get placed from their localities. By opting to become a brand’s store, store owners are earning revenue on products they do not even have in stock and are thus doubling their income by assisting their existing customers.
Great Indian Festivals And Great Indian Deals
During the festive season in India, online shopping witnesses a mammoth amount of orders, thanks to the fantastic deals and discounts that flood e-commerce websites. It’s gotten to the point where every major festival in India is associated with a major sale and extra Cashback on top of all existing discounts. People are not only buying the things they need but are eagerly waiting for such occasions to fulfil everything on their shopping lists. Users leverage steal deals on gadgets, fashion, and beauty products during these sales. So realistically, Cashback can never go out of fashion. Users showed a clear preference for online shopping with over 45% of them coming from tier 2, 3 and 4 cities.
Unmatchable ROI
Since the inception of online retail, Cashback has been the most effective tool to scale user acquisition and retention. To date, if we talk strictly about numbers, we have paid Rs 200 Crores to over 1 Crore shoppers across the country. In that sense, Cashback has stood the test of time and continues to be one of the most influential and high ROI tools for these e-commerce platforms when it comes to scaling up and scaling fast.
Cashback has and will always be the cherry on top of seasonal discounts and offers, and will remain the ultimate hook for users. In our experience, it works as the best incentive when it comes to Point of Sale conversion. Cashback is too deeply ingrained in the psyche of the Indian shopper and enjoys a very loyal fan base of its own. The idea of saving extra on every purchase is something that excites most of us. And so, it is exciting to keep scaling cashback business and creating a win-win situation for the partner brands as well as the consumers.
The author is Swati Bhargava Co-founder CashKaro & EarnKaro
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