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Indians bargain hard and it is this habit that CashKaro is looking to cash in on online.
The company offers discounts over and above the deals offered by online platforms such as Amazon, Flipkart and MakemyTrip, and banks such as ICICI, HDFC and SBI.
CashKaro, a website that e-shoppers use to maximise discounts, has credited ₹100 crore in the last six years to the accounts of 3-4 lakh people.
These cashbacks — wherein users get money deposited in their bank accounts, or receive gift coupons — are over and above the discounts offered by the websites and credit card firms. Instances of people getting ₹20,000-25,000 a year this way are not uncommon, according to CashKaro co-founder and CEO Swati Bhargava.
‘Free money’
‘The company, which counts Ratan Tata as an investor, currently has two million users. “You are giving free money in a country that loves to save money. What is there not to love?” was Tata’s response on CashKaro, when Bhargava pitched it.
Abut 55 per cent of CashKaro users are from tier-1 cities. The remaining are from tier-2-5 cities, from Kochi and Lucknow to Ambala, Karnal and Shillong.
The user profile is diverse: corporate honchos to entrepreneurs, students, housewives and business heads. “People and business owners are using CashKaro to pay electricity bills, to save 1 per cent of the total bill, said Bhargava. “They do so by paying electricity bills through Amazon, which they access via CashKaro.”
Consider Amal Augustine, a Delhi-based student and a CashKaro user since 2013. He has seen his bank account swell by ₹1.45 lakh till date due to CashKaro. Of this, ₹30,000 is from his own shopping, while the balance is thanks to his over 2,300 referrals. Augustine does his due diligence for best deals using other similar places such as desidime.com.
Revenue source
CashKaro categorises itself as an affiliate marketer. Its revenue comes from a 20-25 per cent commission from the seller. “From the commission we earn for each transaction, Cashkaro shares almost three-fourth with each buyer,” said Bhargava.
“As long as retailers get margins”, it can continue giving cashbacks, says CashKaro. The ₹23-crore company, profitable in certain months of the year, posted a loss of ₹1.5 crore in 2018.
“The company can turn profitable by lowering the marketing spend, but our focus is to be like similar sites in the US, UK and China that drive up to 3 per cent of total online sales,” observed Bhargava, who believes that CashKaro can grow 15 times over the next two-and-a-half years.
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