It's payback time

They say what goes around comes around. And here we are talking not about paying back in kind but in cash. “Get paid for shopping online,” says Rauf Saiyed, a 29-year-old entrepreneur and founder of Cazbak.in.

Rising VAT, surging inflation and looming hikes in interest rates mean a serious squeeze on the pocket. For those looking at ways to shave costs through online shopping, cash-back Web sites are proving popular.

Cazbak.in, founded a year ago in Vadodara, Gujarat, is based on a shopping rewards concept. The loyalty-based Web site redirects users to affiliated retailers and, in turn, rewards them with cash back from their spending. For example, on buying a book priced Rs 1,000 from a Cazbak partner store offering 5 per cent cash back, the buyer gets back Rs 50.

“Once I get intimation from the associated retailer that the customer has made a purchase, I enter the information both into my system and the customer's, which gets validated within a month. Once the customer has accumulated a minimum of Rs 300 in his/her account, it can be claimed as cash, cheque, mobile recharge and other methods specific to Cazbak, he says. Cazbak was named among 10 aspiring start-ups at IIT-Mumbai's Entrepreneurship Summit in January.

Armed with a Masters in Computer Science from Rochester Institute of Technology, Rochester, New York, Saiyedworked two years as a research engineer in Dialogic, a unit of Intel.

In 2009, he decided to move back to India. Passing through London, where his sister lives, he had his Eureka moment. Rauf found his brother-in-law hooked to Quidco, a popular cash-back Web site in the UK, as he scoured for the best deals for his friends and family. “Even when I lived in the US, I wasn't aware of a Web site or a concept like this,” he says. Researching the game over the next six months, he gathered the technical expertise, designed the process and launched the site with much aplomb in the US in early 2010. The game, however, changed for Saiyed at his first media interview when a well-wisher suggested, “Why don't you focus only on India, where the e-commerce industry is growing by leaps and bounds?” That sowed the seeds for Cazbak India.

Cazbak.in went live in October last year. It has more than 100-plus online stores across India offering services in categories such as travel, health, insurance, telecom, apparel, jewellery, entertainment, electronics and others.

But is Cazbak a viable business model for the Indian set-up?

“Yes, India is booming as far as online shopping is concerned. We started off with promoting Cazbak on Facebook and got 300 users in the first month. Today, we have more than 3,000 users and our daily transactions are climbing,” he says. Explaining the revenue model, he says, “When a user gets redirected from Cazbak and buys at a participating store, the store pays Cazbak a commission. Instead of keeping it all, we return a major chunk of it to the buyer.” As for the partnering e-commerce sites, it's a pay-per-performance model. “And that is why it is easy for us to convince the client (retailer in this case) that you don't need to pay anything initially, just watch the performance and then decide,” he adds.

Asked about worries over online fraud and identity theft, he says, “No, we don't deal with private secure information. At Cazbak, we just need your name and email address. The clients need to convince the users to shop.” And, not surprisingly, Rauf considers Steve Jobs his biggest source of inspiration.

Demand for travel

Travel shopping was the first segment to take off on Cazbak, says Saiyed. “Travel got the maximum traffic; people were hesitant to shop for luxury brands, apparel and such. But, gradually, we started getting customers for other segments as well. It was just a matter of time... Flipkart, Fashionandyou, Yebhi, Cleartrip, you name it … and we have traffic for all of it,” he says.

Small-town shopping craze

Suresh Kumar (name changed on request), an ardent Cazbak user from a small town near Chandigarh, is Saiyed's most zealous customer. “He does ten transactions per week. He shops a lot from fashionandyou, yebhi, flipkart etc. I realised he is in a remote town where he won't have access to things city folks do. A dentist by profession, he has earned Rs 7,000 through Cazbak,” he says.

South splurges

But what really proved a revelation is the fact that Cazbak's maximum traffic comes from South India. “When we did Facebook ads with Yatra, my friends from the IT industry who are from the North but work in the South started using the travel deals on our Facebook page. In terms of Internet connectivity, as you go up North, people are not as computer-/IT-literate as they are in cities like Hyderabad, Bangalore and Chennai. That's where the online industry finds a comfortable home,” he says.

His team includes eight back-end support staff. Conceding there is mounting competition, he says he is unfazed by it. “We have a section on offers which are exclusive to Cazbak users, and you won't find it anywhere else. We are also coming up with a Deals section. We are very careful about customer relationship management. We engage the users with personalised service. We give refund offers that are highest in class, mobile recharges, gift vouchers, bank transfers and the like.”

His daily routine includes meeting investors, devising marketing strategies and taking the road less travelled to make Cazbak a one-stop shop for customers. So, is the shopper today more confident of e-tail therapy? “Till recently, the shopper was wary of giving away credit card and debit card details online. But what changed the game was cash on delivery, which is the most reliable payment option for customers today. The big players like Flipkart have cleared the highway for smaller players, making the risk of fraud less than before,” he says.

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