Startup of the week: At times getting money back is too good to be true – Ravitej Yadalam
Ravitej Yadalam, CEO and Founder, Pennyful a cashback and coupon website, always wanted to achieve something in ecommerce space. But, the heated competition would have made it almost impossible to create something that would completely break the clutter.
It is then that the idea of discounts hit his mind. Sales, discounts and cashbacks are something that every consumer will slog for – be it an online deal or an offline shopping spree.
But an affiliate website’s role is not easy. Indian consumers are yet warming up with the concept of coupons, cashbacks and deals.
With the heated competition in the e-commerce space and the changing role of coupons in terms of a marketing element IndianMediaBook gets in conversation with Yadalam. Edited excerpts.
What was the idea behind Pennyful? How did you come up with the main thought?
The ecommerce space always fascinated me, and I began experimenting with the idea of selling items online in college during the 2007-2008 timeframe. During this period I used to work with a few vendors to sell their products online.
This is when I noticed an interesting consumer trend: they prefer branded products over unbranded ones, in spite of the latter having just as many features at a better price. This thought made me move towards the affiliate marketing space.
Pennyful.com was launched for the U.S. market. Through Pennyful.com, we began to give real cash back to our customers for every purchase they made through us. Based on the success we saw from the U.S. market, and the increasing popularity e-commerce was gaining as a concept in India, we started operations in the Indian market as Pennyful.in, making us one of the first cash back site to enter the country.
Please shed light on your business model.
We work on the affiliate marketing model. What this means is that we direct our customers to our partners, for instance, Amazon.in. For every sale we help generate for Amazon.in, Amazon.in pays us a commission. It is this commission that we share with our customer as cashback. This way all parties win.
How is Pennyful different from other coupon websites? And why people choose this? What is the USP?
The main difference between Pennyful and other coupon websites is the fact that we are so much more in terms of our offerings. We are primarily a cashback website.
While a discount coupon gives you discounts on your online shopping, we also give the shopper real money back on this online purchases. This cashback is given to the shopper over and above the discounts he gets on an online shopping website. This enables the online shopper save even more!
We have also put in a few policies which differentiate us from other cashback website, and makes shoppers prefer us.
We want our users to use Pennyful purely for the experience we provide and hence we levy no minimum cashback withdrawal amount on our users. They can withdraw back any amount of the cashback they accumulate through us, from as low as Re. 1 to as high as anything they like.
Please take us through your financial journey. Are you looking for a new round of funding?
We have been completely funded by family and friends so far.
What kind of difficulties and hurdles did you face while establishing the website?
One of the biggest challenges we face in India is that cashback, as a concept, is still relatively new to the market. Hence, educating our customers still remains a priority for us as a cashback company. At times, it seems that receiving your money back is too good to be true, and is often misconstrued as being the same as a discount. But once our users see that there is actual money coming back into their bank account, they become believers and evangelists of the concept.
What are the advertising and promotional strategies to take Pennyful’s services to its TG?
Most of our advertising/promotions activities are directed towards Social Media platforms. As one would be aware, social media is a very important element in the lives of our target audience and hence is a very important way for us to reach them.
We also participate in collegiate forums and events to spread the word of “shopping and earning”.
What kind of response you are getting from advertisers and consumers?
The Response we get from advertisers is phenomenal. They recognise that we are helping our users significantly and their feedback is an acknowledgement of this.
The traction we have received for Pennyful.in in India has been tremendous. The feedback our customers have been giving us so far has been overwhelming. We did expect to see positive traction for the site so early, but the way our customers have been reacting to receiving their money back from us makes me know that we are on the right track.
We have so far given over 1 crore back to our customers and this number is not only growing significantly, but is also a testament of how popular brand ‘Pennyful’ has become with our audience.
Are e-commerce players and brands finally seeing coupons as a way of marketing?
Definitely, Cashback and discount coupon websites are no longer being seen as an optional element, but as a much needed extension to online shopping brands. This is being recognised and acknowledged by e-commerce players, and we are now seeing that they are more open to this form of marketing.
Would you say that Indian startups face more hurdles in raising funds?
While this might have been the case many years back, success stories of startups have now encouraged VCs to invest in startups. So today, as long as a startup has an economically viable business plan, and are catering to a demanding audience, they will always have investors.
What are your plans for the next one year? Do you have any expansion plans?
Our focus currently is on getting our brand out there. We want to educate more and more consumers on the benefits of shopping through Pennyful online. We are very optimistic about the future, and the increasing popularity of e-commerce in India bodes very well for us.
As seen on IndianMediaBook