Is Cashback a Blue Ocean Market in India?

In India online shopping is on boom as the e-tailers lure away smart buyers with lower prices, heavy discounts and door-step delivery. The trend of online shopping began in last 3-4 years, with the rise of India based online stores like Flipkart, Snapdeal, PayTM, etc.

Growing Online Shopping In India
The business of online shopping in India has grown to $23 billion in 2015 from $13.6 billion in 2014, registering a whopping 70 percent annual growth. Online shoppers are expected to increase from 20 million in 2013 to 40 million in 2016, as an additional 200 million Indians will access the Internet in three years, with majority of them coming online through smartphones.

Problem that Shoppers face
Whenever a Shoppers shops online, what exactly does he look for other than quality of product, the answer is simple Discount. Now how to get the discounts on these online shops, as you just can’t go and bargain like you can do at a local shop. Till last year the promotional coupon codes were the only option to get discounts online in India.

Simple & Effective Solution
Now the trend is changing & the affiliate marketing is growing, which is leading to the rise of Online Cashback sites in India. These Cashback Sites promise you to find the best possible deals available online, with available promotional codes and earning extra ‘CASHBACK‘ on all the purchases you do online. This extra cashback is just like a cherry on the ice cream.

Users of cashback websites can know ahead of time how much they stand to get back for their purchases at each specific retailer before they buy. Sites vary on what form of cashback rebates they offer their users. Some programs will provide the users with a percentage of the total purchase price, while others have a flat sum that they pay out for each action.

Concept behind Cashback Website
When a customer makes a purchase online, instead of visiting the retailer directly, they may choose to follow a link from a cashback website to generate a monetary reward when buying products or services. The cashback website receives a commission from the retailer that, after the purchase is confirmed, is shared with the customer who made the purchase.

How Cashback Websites Work
Image Taken from MeriMoney.com

The amount of time that it takes to receive the cashback benefits is dependent on the site. Certain sites will make their payments every four to six weeks, while others will only issue their rebates after a few months. The time gap between purchase and cashback payment is observed to rule out cashback payment to cancelled or returned goods.

Conclusion
For now less than 5% of online shoppers use these cashback websites in India, and they are still missing on these awesome rewards because of the lack of awareness on this topic. These Cashback websites are all set to grow mulifold in next couple of years. And will stand parallel to the Online Stores.

Let’s wait & watch what lies in future.

2 thoughts on “Is Cashback a Blue Ocean Market in India?

  1. QQ – when they can pay or I would say ready to pay commission to the retailers.. Why can’t they give direct cashback to the consumer. If they start paying commission to retailers.. It would go again their own sites.. People may stop going to their sites directly. Instead they can purchase from retailers

    What’s your take on that?

    1. Its same like the advertisement cost, but the only difference is in advertisement money goes in the pocket of Publisher and sale is not guaranteed. But in the cashback scenario money is given only after the Sale is done & money goes in the pocket of consumer, this ways the sales are guaranteed.

      Yes there will be instances where People may stop going to their sites directly but still they will earn, these Online shopping sites profit margin is between 5 – 35% & as a cashback they share just 2 – 10%.

      So its not a bad deal for them.

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