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India’s best cashback site – Pennyful !


Ravitej Yadalam, Founder and CEO of India’s first cashback site Pennyful, talks to Techstory about his commitment towards cashback, creating differentiation in the market and moving into the healthcare cashback space with MediRupee .

Tell us about Pennyful.

The company I started, Pennyful Online Pvt. Ltd is divided into two parts. The first is Pennyful.com, which caters towards the U.S. market, and the other is Pennyful.in which is focused towards the Indian market. Both are essentially cashback shopping websites.

As the e -commerce industry gained popularity, customer behaviour saw a change. Online shopping was once merely related to the convenience of buying whatever you needed, from the comfort of your own home. But now, the consumer also shops online for the great prices and discounts available on online shopping stores. We wanted to take advantage of this fact and give shoppers an additional way to save money. Through cashback, shoppers get real money back to their bank account. Users can get cashback over and above the existing discounts they get when they shop online.

We started this model in the U.S. market with Pennyful.com as the concept was already tried and tested there and was a safe bet for us. Once we saw success there, we brought the concept to India as Pennyful.in. When we came to India we were the first cashback player here. Today, we are the largest. As shoppers, Indians generally look to save as much money as possible and hence, the cashback concept was extremely successful here.

In U.S., we currently work with over 1500 shopping websites, and in India, we work with more that 250 of the top ecommerce websites such as Flipkart, Amazon, Myntra, Jabong etc.

Tell us a little bit about the industry you operate in.

As mentioned above, the Indian market is an extremely price sensitive one. Users today have access to great prices and discounts online. This factor, with the added advantage of convenience has led to the growth of ecommerce in India. We give online shoppers another reason to shop online through cashback, which means that besides saving, customers earn as well by shopping online through us. Currently the ecommerce industry is poised at an estimated Rs 13,900 crore in 2012-13, and is expected to grow to Rs. 50,000-crore by 2016. This growth will impact us positively as well as it will bring us more potential customers as well.

Whereas competition is concerned, we believe that since we were the first cashback website to enter the Indian market, the concept of cashback in India was brought in by us. It is encouraging to see other similar companies seeing value in the concept. We also look at competition as a way to ensure that we always stay on our toes.

Moving on to trends, while consumer behaviour in the ecommerce market is well documented, insights on the Indian cashback user are not too well known.

As we were the first player to the market, and since we do not force our customers to accumulate a certain amount before they can withdraw their cash back, we, at Pennyful.in, feel that we are in a good position to provide insights on this topic.

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 one, where the user is sceptical 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 the 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. 3,000 on an average, but there have been many instances where this has even been much higher.


How does Pennyful differentiate itself from other players in the market ?

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 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, 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.

Most importantly, we want our customers to come back to us, but purely for the customer experience we give them and nothing else. We do not want to force customer loyalty, 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. 1. This has definitely been one of the reasons our customers love us.

What also sets us apart is the fact that we are the only large Indian cashback website to have a fully functional browser add-on. Historically, a user has always had the task of remembering to sign up into Pennyful, and visiting shopping sites through Pennyful to ensure he gets cashback on his online shopping. But now, through the Pennyful browser extension, he can ensure that he never misses out on cashback opportunities again! This extension makes it easier for users who install it, to find out about the cashback and coupon deals they get on the sites they visit, and makes cashback shopping easier.

What inspired you to start Pennyful?

The concept of Pennyful came to me when I was in college. The ecommerce space always fascinated me, 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.

I saw that customers preferred branded products over unbranded ones, in spite of the latter having just as many features at a lower cost. This made me move my ecommerce experiments to the affiliate marketing space. Through affiliate marketing 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 value. And the feedback I got for this model was incredible.

This is how Pennyful 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 customers for every purchase they made through us.

The initial challenge in the U.S. market was that ecommerce there is extremely sophisticated. There are many players and establishing a differentiation was initially challenging. Challenges included, setting up the office and ensuring the operations which ran out of India aligned with the U.S. time zone. But we overcame those challenges and today we work with around 1500 ecommerce players in the U.S. and we are one of the few players there to have a price comparison tool.

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 became the first and is still considered as the best online cashback shopping site in India

Tell us a little about your background

I Founded Pennyful. I studied under the ICSE board from The Valley School in Bangalore, and then my B.E. in Electronics and Communication Engineering from R.V. College of Engineering, Bangalore.


Tell us about your journey so far .

The journey of Pennyful so far has been great and the feedback our customers have been giving us so far has been overwhelming. We did expect to see positive traction for the site, 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.

As of now, we have given over a crore back to our customers in the form of cash. And given the pan India nature of our business, users all over the country have saved tremendously on their online shopping through us. While metros and large cities contribute a large portion of our audience, we have also been seeing an increased uptake in Tier 2 and 3 cities. In fact, today about 20% of our audience resides in these cities.

The last 2 years have been extremely fruitful and exciting. We have been successful in garnering traction not only in the number of users we acquired, but also in the number of partners we work with.

In fact, when we compare our growth in terms of our customer base with last year, we saw a 150% increase Y-o-Y, and this is expected by 200% this year.

Our team, though small in number at 15, is highly skilled and is the reason of the success we have been seeing.

After seeing the success and response Pennyful got in the Indian market, I decided the time was right to start another similar venture. This is called MediRupee. MediRupee.com is also a cashback related project but focuses solely on the healthcare vertical. It was started by my friend and co-founder, Manu Swarup, and I, in 2013.

We started MediRupee based on our research of the Indian healthcare market where we found that about 9% of an average Indian’s income goes towards health expenses and the number can sometimes go upto 50% for middle and lower income households. And a majority of the expenses happen out-of-pocket. A majority of the people do not have insurance, and even if they do, no insurance covers the entire gamut of healthcare services. This is the principle on which MediRupee came to be.

MediRupee is India’s first and only free healthcare cashback program, wherein a MediRupee member can get cashback on his healthcare expenses, for everything his insurance does not cover. Today, MediRupee has over 200 healthcare institutions as partners, such as Apollo Hospitals, Fortis, Manipal Hospitals etc., and caters to 7000 locations across 6 cities.

MediRupee.com, though still in its nascent stages, has already seen extremely positive traction.

 What are some of the most challenges you have faced during your journey ?

 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.

Any exciting moments in the journey ?

The thrill of venturing out to start your own business is extremely exciting. But nothing beats the excitement when we received our first sale!

So what next for Pennyful ?

We, at Pennyful, have been seeing tremendous growth over the last few years since our inception and this momentum is expected to continue, if not increase dramatically. We consider the last few years as the “base building” years and the coming years will be the time where we see considerable growth. 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 in more stores and services 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 the riskiest thing you have done so far?

 I would have to say that bringing in the cashback concept to India, a concept which was unheard of at the time in the Indian market, was easily the riskiest thing I have done. But I’m happy to say that the risk has paid off.



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