In a surprisingly short amount of time, cashback websites in Southeast Asia have started to produce results that exceed the expectations of industry experts, and even the very founders themselves. Their rapidly growing consumer base goes to show how more and more Southeast Asians are not only taking their shopping online, but also relying on cashback to save money on their purchases. How cashback websites work is simple; they partner with hundreds of merchants and secure a certain percentage of cashback for shoppers who click through them, thereby earning commission and passing on these savings to shoppers.
Changing Consumer Attitudes
The overwhelming response from cashback users comes as a surprise for most. The cashback model, though being well-established in the UK and US, is foreign to SEA. The cautiousness and thrifty habits of Asians are well-known and these values can make an influential difference on how certain types of businesses launch and grow locally or regionally. Indeed, the popularity of cashback websites here reveal how such traditional attitudes are gradually shifting to a more accepting and globalised outlook, fuelled by increased access to the Internet that connects whole communities across borders and continents.
Startup Dynamism
Besides consumer response, the speedy growth of cashback sites in SEA can also be credited to the impressive efforts of the startups that brought the cashback model to the region. These small companies are usually composed of young working adults who have cut their teeth at larger e-commerce companies and want to try striking it out on their own. Their areas of expertise range from marketing to technical skills and the dynamic teams that they form are just enough to get a cashback website up and running. Being a compact company has many benefits: manpower costs are cut down and office space is rarely a problem. Their size also makes it easier and faster for them to respond to trends or problems as well as concretise ideas. The lack of hierarchy in startups makes discussion and implementation simpler and it’s this new speed of operations coupled with a culture of experimentation that is propelling so many startups to success.
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Homegrown startups have the benefit of familiarity with the region and this thorough understanding of the culture and prevalent trends enable them to engage with customers on a more personal level; most partner merchants are decided on only after analysing which one locals shop at most frequently. Customer service is also naturally more understanding and responsive to consumer needs and woes.
The brains behind these regional cashback websites have plugged the gap in the SEA e-commerce industry, bringing and adapting this new model for online shoppers to enjoy. It’s a win-win situation where both consumer and business reap the benefits of the well-established online shopping sector. It’s definitely a lucrative market for cashback websites as even older generations are getting used to shopping electronically. Lai Shanru, head of Marketing from ShopBack, the top cashback website in Singapore, comments on ShopBack’s growth figures – “There are some 200 million internet users in the region, who are potential online shoppers. Having launched the company in August 2014, we have seen a 50% month-on-month growth in shopping transactions”.
These entrepreneurs have a knack for identifying high-potential business models that they can adopt and adapt – it’s not about coming up with an original business idea but having an acute eye for what works and what doesn’t. Rather than breaking into the market with a completely new idea, competing with an adaptation of a tested and proven business model is the safer and smarter way of doing business. These startups are embarking on a business venture that they know have a high chance of working out because others have already brainstormed and tested it out – that’s strategy and planning.
The Customer is Always Right
It’s safe to say that cashback websites have really taken root in the region and are branching out to more merchants and more customers. Judging from the number of repeat customers and new users, the entrepreneurial teams have their work cut out for them. The satisfaction of the customers speaks volumes about the success of these websites. Online shoppers today want more than just regular sales- they want bigger discounts, better deals and the best price possible for even small purchases. In short, the best cashback websites have managed to convince shoppers that they can save money in the long run and shown reliable results that keep shoppers coming back for more.
It’s a competitive market but no doubt a lucrative one, if cashback companies can grow sustainably and manage consumer demands. The challenge for these businesses is to differentiate themselves from others who have had the same idea. It is only by constant improvement that firms can fight off competition and meet consumer needs. With more planning and plenty of foresight, these new companies will continue to reap substantial profits and the e-commerce cashback industry as a whole looks set to thrive.
