Get Real Cash Back: - Integrating Digital Technology and Market Analytics

Swati Bhargava is the CEO and co-founder of CashKaro, which has integrated digital technology with social media to evolve a new concept in e-commerce which is built around paying real cash back to the clients purely by the market analytics method. She spoke to Archana Verma of the Dataquest in this interview. Excerpts follow –

Q – Can you tell us something about your background?

A – I grew up in Ambala.

Q – Are you from Himachal?

A – No, I am from Ambala itself. I grew up there and then I got this Singapore Airlines scholarship and I did my 11^th and 12^th over there. Then again I got a scholarship from the London School of Economics. So I went there and did my undergraduate study there with Honours in Mathematics and Economics. Then I got a job offer at Goldman Sachs in London. So I joined there and did investment banking for five years. It involved quite a lot of hard work in terms of hours, which in banking are quite grueling as you know. So after working like that for five years I thought that I am working so hard; I should really do something for myself, where I can get more out of it. And I wanted a break to do something different. Then I also got married to Rohan, who is my husband and also the co-founder of CashKaro. He too was in the finance sector in London and he also wanted to do something of his own. So we started exploring ideas and we came across this idea of cash back and we started using cash back sites in UK. And we thought that this was great that we were getting cash back while shopping online. This was amazing and we wanted to do something like this. But not enough people knew about cash back. This was a problem that we thought we could solve. We started setting up cash back sites for large organizations and newspapers that had some reach. So we set up the cash back sites for the Daily Mail newspaper etc. Then we were waiting for the Indian e-commerce economy to mature a little bit so that we could bring cash back here. And in 2013 we thought it was a good time to start Cashback business in India as E-commerce was growing at a large pace. Flipkart was there, Jabong was there, commerce was growing. So, we expanded to India to launch CashKao.com. Now, we are India’s largest cashback site, because we were able to raise money early and a lot of players in the market remained unfunded.

Q – What type of technology do you use? Is this technology evolving and in what direction?

Most of our systems are built on PhP. And it’s a content management system that we use and that is linked to other tracking and other methodologies that we’ve built with different retailers, which allow us to track transactions. The new innovation that is happening is not only in cash back and coupons, but also in price comparison. So we’ve actually included a whole module on CashKaro, where you compare prices of products and you can also see the amount of cash back available on each of it. So you can make your buying decision at CashKaro. Now we are also strengthening on mobile as well. We are looking forward to grow nationally as well. So technology-wise there are good user enhancement and user experience happening.

Q – How has it grown in the last 3 years and where do you see it growing in the next 3 to 5 years?

So far we’ve almost driven a thousand crores worth of sales through our partner retailers, which is quite a lot in the light of the fact that the e-commerce itself is growing. We’ve given a lot of cash back to the users as well, which is real cash. But I really think that by 2020 the Indian e-commerce projection is that it will hit hundred billion dollars. So I think our affiliates should be able to drive 20% of that as an industry. And of course being a market leader at that and cash back as well, I am sure we can touch 2-3 billion dollars mark by 2020.

Q – Can you talk about the relevance of social media and how it has helped companies such as CashKaro?

A lot of entrepreneurs and founders don’t always work on strengthening their social media profile. Because they think it requires too much work and they don’t have time. They are busy. But I have found that having strong presence on Twitter enabled me to connect with all stakeholders. All customers of CashKaro are on Twitter. They communicate with me directly. It gives them confidence in the brand. So I think for a start up to have a face that you can relate to, a face that you can reach out to, it really helps. I think social media helps bridge that gap. We also connect with investors, journalists, press, retailer partners; we approach people on Twitter and we’ve got responses on Twitter as well. I think social media has broken down some of those barriers and if you are the champion of your own brand, it helps to strike a different chord and connect with your customers. It may not be possible on other channels.

Q – So which social media platforms are you using?

I use Facebook and Twitter more often. I am also there on Instagram and Pinterest.

Q – Do you also use the paid advertisement campaigns that Facebook and Twitter have?

No I have not used the paid version. I am using only the free version.

Q – And do you feel that it has helped you?

I think so. It helps a lot and it also helps in profile building as well, in terms of getting your brand known, getting yourself known. Ultimately if people use CashKaro if they know me, or if they know the brand, to me it doesn’t matter. I want more and more people to know about CashKaro. And if I can personally deliver a message about it for that, I’ll do it. And I think that’s where social media gives a good connect.

Q – How do you think this cash back business can help the e-commerce? Because they have cash back, cash on delivery, they also have credit card payment.

I’ll just describe to you a little bit about how CashKaro works. This will answer some of the questions. We work with about a thousand e-commerce players, everyone from PayTM, Flipkart, Snapdeal to Jabong etc. When you go to any of these players and buy anything and if you use CashKaro, we get a commission from them. So we are earning commission from all these retailers. From that we are actually giving cash back to the customer. If you are shopping on Jabong, rather than going directly if you go via CashKaro, you’ll get 13% back from CashKaro on top of whatever coupon there is on the website, on top of any cash back that you may get because you use PayTM or another wallet and if you use a credit card which gives you cash back, you’ll get that as well. The point is that as long as you’re going to any website via CashKaro and then buying, you’ll keep getting cash back from our side.

Q – So does it work out to be cheaper than other options? Suppose I am buying something worth Rs 1000/-. If I use cash on delivery, I’ll pay this amount at the time of delivery. If I use CashKaro, does it work out to be cheaper than that?

Yes, it will always be cheaper. Right now, what happens is that you always pay and you always buy at same price which you see online. If you’re buying something for Rs 1000/-, you’ll pay this amount only, whether you pay by cash on delivery or by credit card. But if you’ve gone via CashKaro, we’ll add say Rs 150/- in your CashKaro account. All your money will collect there. When you have Rs 250/-, you can withdraw it to your bank account. You take it back to your bank account. You do whatever you like with it.

Q – So I actually get the cash.

Yes, you get the cash. Or if you want, you can get Flipkart shopping vouchers. The idea is to give cash back as real cash back to the customer. This is what most people don’t understand about CashKaro. They think that we are a PayTM wallet competitor, or we are another Mobiquick wallet etc. but not that we are actually giving real cash from your shopping from our side, which is on top of whatever else you might be getting. This is what we try to tell people in our communication that this is how cash back works.

Q – Would you like to say something about DIPP guidelines and restrictions of deep discounting etc?

A lot of people ask me that recently the government has said that the discounts are going to fall, so would that affect our business. In that case, we actually feel that some of these guidelines are going to benefit businesses like CashKaro. If the consumer is seeing that the e-commerce site is giving fewer discounts, they will value other saving mechanisms more. If you’re going through CashKaro and you’ll get cash back, you’ll value the 10% extra even more because that site was earlier giving you say 50% off. Now you are getting more cash back. Now that 50% off is gone, so this 10% cash back becomes valuable. So, I think it’s good to now have more and more focus on profitability and revenue generation, because DIPP guidelines actually may help the businesses. But for businesses like us, it’s a good thing, because our cash back is not paid from our own pocket. It’s paid from the marketing budgets. We’re not subsiding anything. It’s not against the guidelines. The users will find it of value because discounts overall are falling.

Q – Usually, companies like yours begin from India and they try to expand abroad if they can. But you began from UK and then you shifted to India. So what was the motivating factor behind this shift? Why didn’t you stay in UK and do this business?

The opportunity in India right now is huge.

Q – Is it better than that in UK?

I think so, because the growth rates here are higher, because the development cycle is a little behind UK. So, our growth rates are higher here. And cash back was already an established industry in UK, but in India we thought we had the potential of building a billion dollar business in this place. That’s why we wanted to be here, where we could build a consumer brand, focus on bringing that value here. That’s what we felt that the opportunity is bigger.

Q – So you wanted to bring something new which was not so well known here.

Yes, it was not well known here, but we knew that it had done well outside. In India people love to save their money anyway. So I knew they would like an idea like this.

Q – And would you like to expand abroad now?

Now we would. We would go to South East Asia, to West Asia, to the neighbouring SAARC countries.

Q – What about back to UK, US and the EU?

We already have a presence in UK. We can continue operating that. We can do it from India. We don’t need to be there for it. That market is fairly saturated for a leading player. We don’t want to go to a market just for expansion’s sake and be the no 5 or no 6. There’s no fun in that. You want to be in a market where you feel you can be the no 1 player.

Q – So what are the challenges in becoming no 1 in those types of markets?

I think education is a challenge. It takes time to educate people that we exist, especially because any one of us has not raised the kind of money that some of the e-commerce players have; 20, 30, 50, 100 million, 200 million. I think everyone is very focused on profitability. We raised about 4 million dollars. That’s not enough to do a TV campaign. So we have to be always innovative about our awareness, about creating that sticky factor, about driving growth, having an eye on the bottom line. Those things you have to be careful about. And I think it’s easy to say that if I have a billion dollars, I am going to plaster India with cash back. But you don’t have a billion dollars, you have a good amount of money; 25 crores is not small amount of money, it’s enough to have a good business. Another thing is that these mass campaigns are not one time things. We can spend 10 crores on a campaign. But TV will only work when you keep going off and on. So, you do TV, you do outdoor, you do radio, you do everything. So, awareness is a challenge that we have to address, one way or the other. But it’s good that it makes us more focused on driving ROI from the money that we spend. The second factor is that we are a category leader in cash back, so we have to train not only users, but retailers as well. How cash back works, why work with cash back sites, how we can drive growth at less cost. So, the sales that we give to our partner retailers actually cost them lesser per sale than it’s for their own channels. If they are advertising on Google and getting their sales from there, it’s costing them much more than what they pay CashKaro. This is why people work with us. So, it’s more related to awareness and education. The more you drive, the easier it gets. Lastly, you always need a good team with you. We are lucky that we really have a good team. But as we are trying to grow and expand, we have to continue getting lucky.

Q – Which are the cities apart from Gurgaon in India, where you have a presence, or where you are planning to have a presence?

We have a technology office in Chennai and we are not planning to open any other offices apart from Gurgaon and Chennai. Because our product is pan India; it’s online. It doesn’t matter where the offices are. But I think to be able to drive correct synergies; we can’t have too many offices. Our business doesn’t need that.