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Looking to save more while shopping online? Cash-backs are your answer
Companies, including CashKaro, CouponDunia, GoPaisa and LafaLafa, have become doorways to hundreds of e-commerce sites.
For a long time, September and October were the best months for buying electronics, since companies would offer big discounts ahead of the festive season. Then came e-commerce companies with big discounts. You could save money on almost everything you purchased online — holidays, clothes, toys, food, books, furniture, dinners sets — all throughout the year.
But lately, thanks to the government cracking down on such deep discounts through its new FDI policy and e-tailers’ own cash crunch, discounts have come down — 35% to 40% less than in 2015. So, enter cash-backs. Companies, including CashKaro, CouponDunia, GoPaisa and LafaLafa, have become doorways to hundreds of e-commerce sites. When you go through any of the cashback portals and make a purchase with an e-tailer, it gives some commission or referral fee to the cashback portal. A part of this commission is given to buyers as cashback.
“We are a marketing channel for e-commerce companies, like a Google that helps them drive sales. The only difference is that we make money only if a transaction is completed ,” said Swati Bhargava, founder of CashKaro, India’s largest cashback company with over 1,000 e-tailers as its partners.
The average saving from cashback is around 5%—2% for electronics to 25% for apparel. You can also make money by referring the cashback site to your friend or family.
Read | How online shopping is changing rural India
Amal Augustine, 21, from Kerala has referred CashKaro to 1,549 people and earned ₹88,827 so far. The cash can be redeemed against gift vouchers from cashback sites, or by transferring it to a mobile wallet, paying bills and doing re charges, or transferring it to the back account.
It is estimated that in 2016, ₹3,000 crore of cashback would be processed. If cash-banks offered by banks, credit cards and payment gateways are thrown in, the market will be more than double of that.
This has led coupon company CouponDunia to pivot into a cashback firm. “As e-commerce grows, cashback will also grow. We are driving ₹1,500 crore worth of sales for e-tailers,” said Sameer Parwani, founder and CEO, CouponDunia.
“They help us acquire new users,” said Nitin Agarwal, assistant vice-president, marketing, ShopClues, which has partnered with a number of cashback companies.”
Ankita Jain, co-founder of GoPaisa, a bootstrapped cashback company, however, thinks differently. “The growth has been slow this year for startups, but still we are adding around 6,000 new users every day and targeting ₹650 crore of sales for our partner brands by the end of 2016,” she said.
Paytm and Snapdeal-owned FreeCharge have taken cash-backs offline as well. “If the customer is new to the merchant, then the merchant funds it. It is like a marketing programme which HUL or any other company runs,” said Govind Rajan, CEO of FreeCharge.
