Indian e-commerce is a rapidly expanding universe and the future looks even brighter. As per India Brand Equity Foundation (IBEF), the Indian e-commerce market is expected to grow to US$ 188 billion by 2025 from US$ 46.2 billion in 2020. By 2030, it is expected to reach US$ 350 billion in value. One of the major factors that has contributed to this surge is the trend of unlimited coupons and cashback offers provided by various e-commerce platforms and payment apps. These offers have proven to be a win-win situation for both the parties as it brings in a huge customer base for the retailers, with the former receiving their products at a more affordable price.
The mantra of “A penny saved is a penny earned” is something consumers swear by. With so many products and brands in the market, the impulse to buy is unavoidable. However, the price factor can sometimes create a huge hindrance and this is where cashback websites come into play. A Cashback website helps retailers get higher conversions by offering these new users certain cashback/rewards, ensuring them a cheaper price than the offline store. These cashback websites have also seen a surge in their revenues. Cashback and coupons platform CashKaro’s scale has recorded 74% growth in its operating income in FY21. CashKaro’s income grew to Rs 98.33 crore in FY21 from Rs 56.49 crore in the previous year.
According to Statista, the global cashback industry is expected to be worth more than $200 billion by 2024, with statistics showing that 46% of cashback participants consider it a vital step in their purchase decisions. As per the same research, retailers who have participated in cashback grew their revenue up to two and a half times faster than competitors who do not use them.
Over the past few years, lots of customers have shifted to online shopping, especially in tier 2 and tier 3 cities. With the help of digital wallets, there is always some amount of cashback which the end-user receives and this is how shopping never stops. If discount helps the customers to get attracted to an online site, cashback and coupons ensure that they retain those customers.
As the e-commerce market continues to grow, coupon and cashback models are here to stay, opening newer avenues for retailers to rope in and retain customers. Cashback that offers true value-for-money with the potential for customer retention could well be the new catalyst for Indian e-commerce growth.
— Sadaf Anjum