Cashback companies battle it out on differentiation

A popular tool among retailers and consumers, cashback was trendy in countries like the UK even a decade ago. Young spenders, especially students, and households benefitted from savings on grocery bills and at electronics stores.

It took a while for the wave to pick up here. But now as other markets see a saturation point in the space, India sports a slew of names in a heated battle with each other for market share. This week, Pennyful.in launched a product discovery and price comparison tool even as Cashkaro.com made a similar move.

What began as affiliate marketing — promotions of deals and discounts from across numerous online retailers on one platform — has evolved into a sector teeming with cashback start-ups looking to deliver money back to consumer wallets. By adding search and price comparison tools, Pennyful.in and Cashkaro.com aim to make the shopping experience more rewarding.

“As a start, we have launched the product search tool for Snapdeal, Amazon.in and Flipkart, as they are currently the most popular sites in the Indian market. We will also be extending the service to more than 400 of our partners in the coming days,” said Founder Ravitej Yadalam, Pennyful.in

In 2010, Pennyful.com was set up in the US, where it partnered with more than 2000 online store partners. Entering India in late 2011, Pennyful.in became one of the first players to take the cashback business seriously. In a bid to gain trust, it began allowing customers to withdraw cashback amounts as low as ₹50 from their accounts.

Rohan and Swati Bhargava’s Cashkaro.com is a younger venture and an aggressive player. It had a predecessor in Pouring Pounds, a cashback business tailored for the UK market, launched in mid-2011. By April 2013, Cashkaro.com entered India and had investors on board by August.

“Both Pouring Pounds and Cashkaro have had healthy growth but the India market has been very exciting. More than 2.5 million orders are processed each month on Cashkaro and Pouring Pounds sees about 1.5 million orders,” reveals Swati Bhargava.

Now what if consumers could have deals and discounts on their fingertips as well as earn cashback from a community of shoppers?

When it began operations in 2011, DesiDime chose to differentiate itself by allowing users to themselves generate content focused on deals. Some three months ago, the parent company Parity Cube launched Linkis.in to allow shoppers to earn cashback from their own shopping as well as a friend’s shopping.

“We’ve sent 300 crores worth of business to merchants over the last three years. We want to grow that to about 250-300 crores a year. With Linkis.in alone we’ve managed to send more than a crore of business to our partners,” declares Mehul Jobanputra, Co-founder of DesiDime and Linkis.in.

General claims indicate that as many as 600-700 cashback and discount coupon companies operate in India.

Whether or not this number is accurate, even a few well-known names make this a crowded sector. However, Pennyful.in is looking for investors while Cashkaro.com trains its eyes on making headway in South-East Asia.

Parity Cube expects to close a round of a ‘Series A’ funding very shortly, with its newest platform Linkis.in all set to launch in countries such as UK and US this year.

While India continues to be a market that is won on price points, some cashback companies are riding hard on other factors of differentiation to keep them neck and neck in the fray.

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