With a valuation of more than $500 bn, Indian eCommerce industry is experiencing a multifold growth with each passing fiscal. But have you ever thought, what makes online shopping a mouthwatering deal? It’s nothing but those huge discounts and attractive deals that eCommerce players offer to their customers.
For Bhavana Sharma, an avid online shopper, who buys even her cosmetic items online, it’s never about saving time or ease of staying at home and shop. What tempt her to shop online are those lucrative deals, discounts and very importantly cashbacks. Cashback is like icing on the cake. The 24 year old young designer now compares many website and finalise the one that gives her highest discount along with a handsome cashback. “If discount is value for money, cashback is double the value,” she says.
This trend of cashback came into light when the online payment turned eCommerce portal, Paytm, luminously injected the strategy of giving cashbacks in almost every online purchase to expand its vicinity.
Paytm, an eCommece platform that scaled exponentially in almost no time, has now finally revealed its secret and announced how much cashback the company has given to its customers as off now.
During the India Digital Summit conducted by IAMAI (Internet and Mobile Association of India), Vijay Shekhar Sharma, Founder, Paytm, in his presentation on the ‘Technology Giving Leap to Financial Inclusion’ shared the some facts and figures of cashback the company rolled out last year. This figure has never been shared earlier. Paytm gave away a whooping 588 cr cashback to its customers last year!
The amount raises a significant question, considering the fact that Paytm reported revenue of around 335 cr during FY 2014-15, with a loss of almost 370 cr. Paytm gave more cashback, compared to the revenues generated.
During this presentation Vijay also gave an overview of the Paytm’s future initiatives in the digital payment space. He said “Paytm is aiming to become the Paypal of digital payments – In US, the term ‘Paypal me money’ is now a legend, as users can simply use the email id associated with one’s Paypal account to transfer the money.”
Vijay expects that the launch of Paytm’s Payment Bank will further catalyse the digital payment landscape and the results would be a fascinating case study for the industry.
These developments and strategies clearly indicate that the focus of the cash-flushed online marketplaces is not just to woo customers but to retain them and make sure they come again and again. Many industry pundits are of the opinion that the future of eCommerce will be driven by cashbacks and other such initiatives that could drift those deal-hunting customers towards online shopping.