Founder and CEO and Founder of Pennyful Online Pvt. Ltd Ravitej Yadalam interacts with Technuter about his company, R&D works, expansion and expectation from the new Government:
To talk about Pennyful.in, it would be good for me to take a step back and tell you about how I started Pennyful.
The concept of Pennyful came to me when I was in college. I always found the ecommerce space fascinating, and I began experimenting with the idea in college during the 2007-2008 timeframe. During this period I used to work with some market vendors to sell products and this is when I witnessed a very significant trend in consumer behavior.
Customers preferred branded products over unbranded ones, in spite of the latter having just as many features at a lower cost, and this revelation made me move my ecommerce experiments to the affiliate marketing space. By doing this, I was able to tie up with large brands and deliver to customers the products they wanted.
While doing this helped solve the problem of selling large brands, I saw that there was another challenge at foot, that of customer loyalty. There were many sites which offered the same product at the same price. So the question I asked myself was, “How can I make my customers choose me over my competition”
The answer was to offer my customers something which others would not offer, to ensure customer stickiness. And I realized that through affiliate marketing, I make an ‘x’ amount of money as commission, and if I shared part of this to my customers as an incentive, I would be able to deliver the best customer shopping experience. And the feedback I got for this model was incredible.
This is how Pennyful Online Pvt. Ltd. was born and Pennyful.com was launched for the U.S. market in January 2011. Through Pennyful.com, we began to give real cash back to our customer for every purchase they make through us.
After seeing success in the U.S. market, and seeing that the Indian ecommerce market was becoming popular and more relevant, we decided to take this concept to our Indian customers.
Formed in November 2011, Pennyful.in is one of the first and best online cashback sites in India. As one would know, the Indian market is extremely cost conscious and the concept of cashback, which we brought into India, has been gaining traction at a rapid pace. Today Pennyful.in works with more that 250 of the top vendors, across various verticals.
In short, Pennyful works 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.
What are latest industry trends in cashback and discount coupons?
While consumer behavior in terms of ecommerce is quite well known, insights on the Indian cashback user have never been discussed.
But we at Pennyful.in feel that we are in a good place to provide insights on this due to two reasons. Firstly, because we give reach cash back to our users, and secondly, because we do not force our customers to accumulate a certain amount before they can withdraw their cash back.
In light with this, we are seeing a trend wherein there are two phases to the Indian cashback user.
The first phase is the experimental phase. During this phase, the user is skeptical about the concept of cashback and feels it is too good to be true. This is when he tries our website for the first time and sees that he has received cashback into his account. After this, the experimental consumer chooses to withdraw his first cashback, even if it is as low as Rs. 5. Once this small amount of money is credited into his bank account, he becomes a believer and moves to Phase 2.
The second phase of a cashback user is that of a confident user. The customer is confident of getting back his money and hence has no inhibitions when it comes to letting his cashback accumulate in his Pennyful.in account. When he does this, he shops and waits for his cashback to grow and when it reaches an amount of money he is satisfied with, he chooses to withdraw it. We have seen phase 2 users withdrawing around Rs. 3000 on an average, but there have been many instances where this has been much higher.
As far as the space is concerned, the ecommerce industry is growing at an astounding rate and this obviously bodes well for us. Also, we have seen a lot of deals and acquisitions take place, which means that competition is definitely setting the shape of the market. Consumer behavior and feedback drives the market and it will continue to do so. We seem to be in the era of consolidation and ultimately there is going to be one clear winner: the consumer.
What is the USP of ‘Pennyful.in’ in contrast of other cashback and discount coupons provider in India?
Customers are the lifeline of a company like Pennyful and we are continuously focusing on delivering the best customer experience for our users.
In line with this, we are focused on delivering the best customer experience to our customer and we want to ensure customer loyalty through this experience. We do not want to force our customers to use us or stay with us, and keeping this in mind, you will see that there is no minimum withdrawal limit at Pennyful.in. What that means is that a Pennyful user can withdraw any amount of money they accumulate as cashback, even Rs. 5. This has definitely been one of the reasons our customers love us.
Moreover, we are also focused on ensuring that our customers have access to the biggest ecommerce brands in India. We currently have 250+ ecommerce websites on Pennyful.in, and this means that customers today use Pennyful.in as a one stop destination for any and all of their online shopping needs and are not overwhelmed by an array of relatively unknown “mom and pop” websites only. In light of this, we are the only cashback player to offer cashback, andcashback in the form of reward vouchers, on both Amazon.in and Flipkart, two of the biggest brands which exist in India today.
What is ‘Pennyful.in’ doing differently to increase its market share in India?
Besides some of the aforementioned points, we are taking further steps to ensure that we deliver the best customer experience for Indian online shoppers.
We realize that a majority of our shoppers are not restricted to desktops/laptops, but are not shopping from their mobile phones. We, hence, wanted to ensure that our customers have access to us wherever they are, even on the move. Keeping this in mind, we recently launched a mobile compatible version of our website.
Also, like any other ecommerce company, customer acquisition is obviously important to us and while we encourage our users to share Pennyful.in with their family and friends, we also want them to be rewarded for doing so. In order to do so, we came up with a Refer-A-Friends policy, wherein our customer gets 10% of his referrals’ cashback whenever they shop via Pennyful.in for one whole year.
Would you please reflect upon your R&D work?
We have invested in putting technologies in place to improve customer experience based on buying habits and consumer behavior. Consumers need to be able to use the platform with minimal handholding from our end. Furthermore, if they do need help with using the website at any given point, considering cashback is a relatively new concept, we need to have checks and balances in place to give them access to relevant information at that point or to reach out to them to solve any issues they may come across.
Do you plan any significant market expansion in near future?
We at Pennyful have been seeing tremendous growth over the last few years and we expect this momentum to continue, if not increase dramatically. The future looks very bright.
As of now our Indian customers have access to all the major Indian stores at Pennyful.in. As a next step, we will be looking at bringing not only more stores, but also stores from beyond India, to our customers.
Our customers are in for some great times, and we will definitely prove to be their one stop shopping destination for any of their needs.
What is your expectation from the new Government in the cashback and discount coupons industry?
As I noted earlier, the ecommerce market in India is currently booming, and will continue to do so. This means that the new government will indeed be keeping an eye on the sector and the buzzword in the ecommerce space right now is FDI retail, and it will be interesting to see if the new government gives a green light on this.
If FDI gets implemented, I believe that consumers will benefit, and a cashback site like Pennyful will ensure that they benefit even further.
Your message to the IT and Tech community…
In the world of IT and Technology, I believe that the most important aspect is to understand and connect with the consumer. Understand the problems that are plaguing the customer and work towards solving them, and if your product is successful in doing so, it will have buyers. Also, with any product or service, patience is the key. You might not see success immediately, but if you have a great value proposition, it will only be a matter of time before you start to reap the benefits of your efforts.