\'E-commerce pacing up with cash back model\'
\'E-commerce pacing up with cash back model\'

With the boom in online shopping, how does your current business model help you in revenue generation?

We are helping small and upcoming retailers acquire customers at relatively low cost, with assurance of payment only post sales. For bigger retailers, we help them retain customers. Once customer is acquired it is also important to be able to make them shop again. Our customers keep on going back based on the cashback, coupon offers we present to them.

Inspired by UK based Quidco's business model, how do you see this cash back concept catching up with Indian consumers?

Cashback as a concept is widely understood, but making constomers understand the concept and more importantly making them believe that such product exist is difficult. But ever since we started marketing, we see huge increase in numbers through word-of-mouth.

You said 'The inspiration for the website stems from the memories of the kirana stores owned by grandparents.' How did you imply the same strategies into your cash back model?

As a family, our idea of business is to always provide value-for-money options to end customers. Our kirana stores too had simple model of charging 10 per cent on top of cost of purchase to consumers, which was clearly communicated to the customers. In the same spirit, we at GoPaisa have a fixed margin of 10 per cent. So whatever commission is received from the retailer, we pass back 90 per cent and retain 10 per cent.

Do you think this business model is sustainable?

All I can say is that while we are a very new to the e-commerce industry, even matured markets like the US have such business models operating. Even Amazon or Alibaba offer affiliate commissions in order to get sales and customers at low cost.

Every product that is available online is available through your website. Don't you think this business model can easily be replicated?

While this business model is straight forward and easy to understand, the time consuming part is building scalable technology background which makes possible 1000s of transaction on daily basis. Unlike ecommerce, where of-the-shelf product can be licensed which can be used to start e-commerce stores, no such solutions exist for cashback product. Second, business profits only come with scale and that takes time and deep commitment.

How do you plan to retain your existing customers?

We keep on running regular contests and giveaways through various social channels and through our website and emails. Secondly, we have observed that once a consumer starts using a cashback product, they keep on coming back again and again. Through our technology initiatives we are the only cashback site which provides instant update for almost 80 per cent of our retailers, while others take anywhere between 8-10 hours to 2-3 days. Thirdly, we try process cash outs at the earliest i.e., within 4 business hours.

What are the emerging trends in the e-commerce segment, and where do you see the Indian retail industry  5 years from now?

While it has been said often, Mobile Commerce is just scratching the surface for now and it will be bigger than e-commerce by next year (i.e., 2015-2016). Overall, both e-commerce and m-commerce will become main stream and will become one of the most important channels for retail.

Some e-tailers are okay with this couponing site, but only for a new visitor not for a repeat customer. Does this aspect squeezes scope of couponing sites?

Retailers have to understand and take us as a media channel, where in order to tap specific media property has to be compensated. When any business advertises on any mass media, he/she is reaching out to a mix of customers who could be new or repeat.

The value which we serve in the value chain is that our customers are pure online shoppers and by spending their media budgets, they get maximum bang for their buck and can be assured of business.

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